The number of restaurant insolvencies increased by 20% in 2017 compared with 2016, according to accounting and advisory network Moore Stephens.
Citing figures from UK Government agency the Insolvency Service, the organisation found figures have jumped to 984 closures, up from 825 in the previous year.
Restaurants including sandwich chain EAT and burger chain Byron have recently announced site closures.
Byron is expecting to close nearly a third of its stores, having signed a Company Voluntary Arrangement (CVA) in January, which will restructure the company and see investor Three Hills Capital Partners become the majority shareholder.
Moore Stephens attributes these closures to an ‘unprecedented level of rollouts of new restaurant chains’. New restaurants are opening within a short space of time in the same areas, which has increased competition on the high street and created an ‘over restauranted’ market.
Head of restructuring, Jeremy Willmont said: “Pressure on the restaurant sector is now hitting even the biggest names on the high street.
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“The jump in insolvencies over the last year demonstrates just how tough the current economic conditions are for the restaurant trade.
“Running a restaurant business is becoming increasingly challenging. Employment costs are rising and the market in areas such as London is becoming ever more saturated.
“Under such tough trading conditions, restaurants should be cautious about building up debt. They can very quickly become over extended as costs continue to rise.”
Verdict Foodservice has invited EAT and Byron to comment.