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Restaurant chains struggling to stay afloat under the increased pressure of rising costs, not least business rates.

News has been hitting the headlines recently about a number of restaurant chains struggling to stay afloat under the increased pressure of rising costs, not least business rates.

Celebrity TV chef Jamie Oliver’s restaurant empire is the latest to come under the media spotlight after it was revealed Barbecoa, his upmarket barbecue chain, looks set to cease trading, with the potential loss of 160 jobs. Another of the embattled chef’s chains, Jamie’s Italian, has also agreed to close 13 restaurants as part of a company voluntary arrangement (CVA), resulting in the loss of 450 jobs.

So where has it all gone wrong for the self-styled Naked Chef?

According to reports, Oliver’s restaurants faced a whopping 28 per cent rise in business rates in 2018, following last year’s revaluation. That would be hard to stomach for any business.

If it’s of any comfort to Jamie Oliver, he’s not the only celebrity chef to have fallen foul of the hike in business rates. French chef Raymond Blanc’s Brasserie Bar venture cited a           12 per cent rates increase as one of the reasons for it posting a near £3.2m pre-tax loss.

Earlier this month, sandwich chain EAT announced that it had appointed Big Four accountancy firm KPMG to assess its options after starting to feel the financial pressure of rising business rates and higher wage costs.

Another well-known Italian eatery, Prezzo, has called in a specialist turnaround firm to advise it on a potential financial restructuring in a bid to save the chain from collapse.

Away from the restaurant sector, in January telecoms giant BT its revenues for the third quarter to December 31 had fallen as a result of higher business rates and pension charges. The group saw adjusted earnings drop two per cent to £1.8bn, while sales fell three per cent to £5.97bn.

These are not isolated cases either. Over the last six months, we have seen a number of High Street retailers, including M&S and New Look, announce store closures and job cuts.

Of course, business rates cannot be entirely blamed for the troubles faced by some restaurants and retailers. Struggling restaurants have had the extra pressure of increased competition to deal with, both from rapidly expanding chains and new entrants to the market.

Coupled with rising wage costs, following the introduction of the higher minimum wage, and the rising cost of imported produce, caused by the pound’s fall in value, it’s easy to see how they have got themselves in hot water.

At a time of so much political and economic uncertainty, the extra burden of business rates is a burden that many businesses will unfortunately not be able to bear.

We have long called for major reforms to the business rates regime to make the system fairer. Changing the frequency of revaluations from every five years to every three should help avoid steep rate rises.

However, this won’t have an impact until 2022, by which time it could well be too late for some businesses already struggling to keep their head above water.

For help with all your property matters contact Adam Rock on 0121 200 1100 or email This email address is being protected from spambots. You need JavaScript enabled to view it.








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