London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

Brits Emerge From Lockdown to Find Affordable Dining Threatened

Brits Emerge From Lockdown to Find Affordable Dining Threatened

When administrators took over the running of Carluccio’s, the struggling Italian-themed U.K. restaurant chain at the end of March, they found investors had one major issue: figuring out how much it was worth in the post-lockdown world.

Phil Reynolds, one of the administrators and a partner at advisory firm FRP, said that potential buyers wrestled with cost estimates for social distancing measures as well as the future of consumer behavior.

“This uncertainty had an impact on the price that parties were willing to pay,” he said.

Covid-19 has hit the hospitality industry hard all over the world. In the U.K., the pandemic piled more trouble onto a mid-market restaurant sector that’s already suffered years of collateral damage from a declining retail industry and associated hollowing out of British town centers.

A sector that until recently was a common target for profit-hungry private equity buyers is now characterized by cost-cutting drives and humbling negotiations with creditors to soften terms attached to debts that they’re struggling to meet.

Staying Afloat

State-led programs to keep businesses afloat during the lockdown have offered respite to some, but not all, according to Kon Asimacopoulos, partner in the European restructuring group at law firm Kirkland & Ellis.

“While some restaurants have been able to access government liquidity schemes, many have been unable to do so given strict eligibility criteria,” he said.

The nationwide lockdown in late March as the pandemic took hold made an early casualty of Carluccio’s, whose blue-fronted outlets are familiar across British towns and cities. It was eventually sold to Boparan Restaurant Group on May 22, ensuring the brand will live on but with just 30 of its 70 sites open and only after more than a thousand job losses.

Equally ubiquitous names are also struggling. Azzurri group, owner of the Zizzi chain, and Casual Dining Group, which counts the faux French Cafe Rouge chain among its assets have also brought in advisers, buckling under debt loads as their revenues collapse.

“Sites in city centers and around tourist attractions are going to be impacted in the medium term as people continue to work more from home and tourist flows remain low,” said Sophie Aldrich, an analyst at Aberdeen Standard Investments.

A third of businesses in the eating and drinking out sectors expect to close some sites permanently, according to a survey conducted by CGA in April.

The number of petitions to wind up restaurants over unpaid bills jumped to 53 from the beginning of the year until April 20, up 165% from the same period last year. Another surge is expected to follow once lockdown measures are relaxed, according to a report by accountants UHY Hacker Young.

Crunch Points

Lenders to the chains have offered some support, for example by providing loan forbearance for a three-month period to their customers, FRP’s Reynolds said, but there may come a crunch point when this expires at the end of June.

As for rent, one of the biggest fixed costs for businesses, most landlords have supported business tenants who have defaulted as a result of Covid-19 -- so far.

“Mainly because this is the right commercial decision, but also because of a government-imposed moratorium on forfeiture action,” Glen Flannery, a restructuring lawyer at CMS, said.

The moratorium ends on June 30 but may be extended after that.

As restrictions are eased, landlord-tenant disputes are likely to increase as landlords seek to recover arrears of rent and tenants seek to rationalize their property costs, he added.

In this environment, Britons are certain to notice shifts in their options for eating out. A customer base that’s squeamish about using public transport will make it difficult to run a viable restaurant in the commercial centers of big British cities which offer few places to park and are often too far from residential suburbs to be accessible on foot.

Will Wright, head of Regional Restructuring at KPMG in the U.K., thinks that as a result, smaller towns will do better than bigger cities.

“High density corporate environments are going to suffer because more people are going to work from home,” he said. “Are people going to go to central London in the underground or bus to go to a restaurant?”
Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
×