The FINANCIAL — Restaurant insolvencies jumped by nearly a third in the last quarter of 2011, with nearly 200 companies going bust, research has found.
According to Caterer and Hotelkeeper, the number of restaurants going out of business during the last three months of 2001 went up by 31% to 194, compared with 148 the year before, according to research by Wilkins Kennedy.
It is the highest number of insolvencies in the restaurant sector in any quarter since the start of 2009.
A total of 684 restaurant groups became insolvent in 2011, representing an increase of 19% from 576 in 2010.
Wilkins Kennedy said the rise in the insolvencies was due to consumers cutting their spend on eating out, while restaurants have been unable to pass on the increase in VAT and minimum wage as well as rising food costs to their customers.
Cork added that banks and other stakeholders were forced to pull the plug on many struggling restaurants in the run up to Christmas.