One in three of the top 100 UK restaurants is loss-making

A third of Britain's biggest restaurant groups is loss-making, up by 75pc in the past year, according to a new study.

Major names on the high street have come under pressure from increased competition in the market, rising wage costs, brought about by the introduction of a higher minimum wage, which rose from £7.20 to £7.50 last year and is set to rise in April to £7.83 for those aged 25 and over, and the Government's apprenticeship levy.

High-end burger chain Byron, Jamie’s Italian and Strada, have all announced store closures in recent weeks.

Accountancy group UHY Hacker Young found that more than a third of the biggest companies in the restaurant sector are losing money, "and there is little respite on the horizon".

UHY's Peter Kubik said: "Pressures on the restaurant sector have been building for years, and the last year has pushed a number of major groups to breaking point. With Brexit hanging over consumers like a dark cloud, restaurants can't expect a bailout from a surge in discretionary spending."

The firm blamed the Government for ratcheting up costs with a series of above-inflation rises in the minimum wage which have been "tough" for a lot of restaurants to absorb.

Industry expert Peter Backman said he expects “more pain” for the restaurant sector this year but predicts it to return to health at the back end of 2019. He previously told The Telegraph: “My feeling is the number of sites that are closing is not enough to restore sanity. Overcapacity is endemic in the sector, you always have it, but it is about whether operators have the funding and the brand to keep going.”

John Webber, of Colliers, said casual dining chains were being squeezed after the revaluation of business rates in April 2017.

“Many companies are now asking their landlords for a reduction in rent as the physical costs of running a property become an increasing burden,” he said.

Jamie Oliver has had to close 12 of his Jamie’s Italian restaurants as part of a company voluntary agreement, while one of Britain’s biggest sandwich chains, EAT, announced last month that it had hired KPMG to help it assess its options.

Byron is also set to close up to 20 of its 67 branches after a period of paying reduced rent to some of its landlords after it secured the backing of its creditors to restructure the business.

Rising food costs, exacerbated by a weaker pound following the EU referendum in 2016, have also been blamed for pressures in the restaurant sector.