Businessman and charity leader Andy Preston has warned that several Teesside restaurants will close this year on the back of news that the number of UK eateries going bust increased by a fifth during 2017.
Mr Preston, who as chairman of national charity CEO Sleepout is the driving force behind Middlesbrough eatery The Fork in the Road, says the closures will be part of a national trend for a struggling restaurant sector.
There were nearly 1,000 insolvencies across the UK restaurant industry in 2017, compared with 825 the year before, as major chains came under pressure from rising costs and competition amid a squeeze on consumer spending.
It was announced in February that Middlesbrough restaurant Brasserie Hudson Quay had closed until further notice, while The Curing House, on the town’s Bedford Street, reduced its opening hours due to “extreme lack of footfall”.
But Mr Preston fears more restaurants are “on the brink” as the perfect storm brings a sudden end to several years of unprecedented restaurant expansion across the country – including Middlesbrough.
“Right across the country restaurants will close and we’re now seeing the beginning of that,” said Mr Preston, who launched The Fork in Road in December 2016.
“In particular the ongoing Brexit uncertainty is hurting consumers’ confidence. Some of the big chains that had expansion plans have put them on hold, and there have been some high-profile victims, with Jamie’s Italian planning to close 12 of its 37 UK branches.
“But everything has a cycle. There’s been a 10-year boom that’s seen more people eating out more often. But now, for the first time in ages, those figures are declining.
“Whether that’s a long-term slide or a temporary blip is hard to say at this stage.”
Mr Preston believes the town’s more recent surge in restaurant openings will make the downturn even harder in Middlesbrough.
“Middlesbrough missed out on the restaurant boom for many years but in the last 24 months we’ve seen it catching up,” he said. “The rate of new openings has probably been too rapid. There aren’t enough diners to go around and keep everyone in business.
“Another issue for the restaurant trade is the fact that the cost of food supplies has been going up by an awful lot – and it’s very hard for restaurants to pass on that cost when consumers are watching the pennies.
“At the same time people’s wages aren’t keeping pace with inflation. That means pockets are getting emptier, so people are understandably less inclined to go out for something to eat – and when they do, they spend less.
“The truth is that very few restaurants make a big profit. Others make only a tiny profit but many restaurants don’t make any money at all.
“The harsh reality is that some of those who have been breaking even will inevitably face closure this year because the increasing food costs and customer belt-tightening will mean they can no longer keep their heads above the water.”
Mr Preston believes the charity-run Fork in the Road, which CEO Sleepout launched with support from Public Health England, will continue to thrive despite a tough year ahead.
He added: “I’m really excited about the next 12 months but the challenge is clear. It will be a really hard year for The Fork in the Road too, of course, but I do know it will stay open.
“We’ve spent the last 12 months or so learning how to run a restaurant but now we’ve done that I’m more confident about the next year than I was about our first year.
“We’ve won lots of accolades for our food and ambience, but most importantly we have a unique selling point in that we exist to create work and training opportunities for long-term unemployed Teessiders.”
The Fork in the Road is run by experienced catering professionals who mentor trainees looking for a second chance in life, including ex-offenders, those in recovery from addiction and the long-term unemployed.
Based in previously empty premises once famed as the home of popular toy shop Romer Parrish, the restaurant has given employment of varying lengths to 12 men from local prison, HMP Kirklevington Grange and also run four full time hospitality courses for the long term unemployed in partnership with Stockton Riverside College.