According to the Government’s latest Company Insolvency Statistics. accommodation and food service insolvencies fell to 270 in August from 323 in July, a month-on-month decrease of 16%.
Sector insolvencies were also down 29% when compared to the same month last year, when 380 business failures were recorded.
“The monthly decrease in insolvencies will be welcome news for the industry,” says Saxon Moseley, partner and head of leisure and hospitality at RSM UK
“Hospitality businesses have experienced slow but steady revenue growth over the summer, while staff vacancies, food costs and services inflation have all reduced in recent months, pointing towards an easing of margin pressures which have put operators under significant strain.”
Despite the signs of easing, year-on-year insolvencies across the sector have increased 9%.
Some 3,419 insolvencies were recorded in the 12 months to August 2023, compared to 3,712 in the 12 months to August 2024.
Moseley notes that there are growing concerns about how this month’s Budget will impact consumer confidence and the cost of employing staff, with speculation growing that the Government is preparing to raise National Insurance contributions (NICs) for employers.
“As an industry that employs a vast number of staff, any employment-related changes risk disproportionately impacting the sector,” he continues.
“At a time where the industry is trying to get back on its feet following a difficult couple of years of trading, it’s imperative that the government treads carefully to avoid damaging its fragile recovery.”
