Covid pandemic drives 163% rise in restaurant job losses in UK in 2020

UK restaurants and casual dining firms recorded almost 30,000 job losses in 2020 as the Covid-19 pandemic drove a 163% jump in redundancies.

Data compiled by the Centre for Retail Research (CRR) revealed that 29,684 jobs were lost across fine dining, independent businesses and large multiple casual-dining chains during the year.

It represents a sharp increase from 2019, when 11,280 job losses were reported across the sector, after firms were hit by two national lockdowns, local lockdown restrictions, curfews, changes to service rules and recently strengthened tier measures.

The CRR also said branch closures by hospitality firms had increased by 76% to 1,621, compared with 922 in 2019.

It highlighted major closure proposals and redundancy plans at companies such as Pizza Express, SSP Group, Casual Dining Group, The Restaurant Group and Mitchells & Butlers during the year.

As a result of the tier adjustments that came into effect in England on New Year’s Eve, 22,082 restaurants are in tier 4 and are all closed except for takeaway, and 4,946 are in tier 3. Only five restaurants in the Isles of Scilly remain open for diners, according to the real estate adviser Altus Group.

Prof Joshua Bamfield, the CRR’s director, said the pandemic had accelerated a major shake-up of the sector that was already taking place.

“The sector experienced rapid growth in outlets during 2014 to 2017 as successful chains added additional branches, but they frequently paid too much, while maintaining quality standards proved difficult,” he said.

“The need to cut costs caused by over-expansion, increased competition and weak consumer demand produced a crisis in the industry before the pandemic.”

A separate report last week showed that the UK high street had shed 177,000 jobs in 2020, with a further 200,000 expected to be lost this year as the pandemic continues to hit the sector.