Alarming figures suggest more restaurants in Sheffield could be closing soon

Prezzo recently confirmed its Ecclesall Road branch was one of 94 across the UK which would be closing (photo: Google)
Prezzo recently confirmed its Ecclesall Road branch was one of 94 across the UK which would be closing (photo: Google)
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A wave of restaurant closures could hit high streets in Sheffield and across the country, it has been warned, with many chains reportedly fighting financial woes.

Prezzo recently confirmed it was closing 94 of its restaurants across the UK, including those at Valley Centertainment and on Ecclesall Road in Sheffield.

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And more big names could follow suit as figures from KPMG show many 'casual dining' chains have seen their debts swell and their operating margins squeezed.

Will Wright, a partner at the financial giant said he expected more firms within the embattled sector to copy groups like Prezzo, Byron burger, Jamie's Italian by using company voluntary arrangements (CVA) to close loss-making stores and secure rent discounts.

"We certainly anticipate this wave of restructuring to continue over the months ahead, as stakeholders take measures to 'right size' their estates to a more profitable core, with the ultimate aim of safeguarding their long-term futures," he said.

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KPMG analysed 125 casual dining companies with revenues of £15 million or more.

It found that 78 per cent of industry players had seen their net debt swell over the past two quarters and 69 per cent were working with operating margins of under 5 per cent.

Mr Wright said economic indicators suggested the outlook wasn't set to improve 'any time soon', and he claimed cash-strapped diners were opting for more 'experiential' culinary experiences over 'familiar fare.

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But his forecast for the industry was not all doom and gloom, with firms which adapt to the changing climate expected to weather the storm.

"I firmly believe that the long-term future of casual dining remains bright, particularly for those operators who are able to stay relevant and who place the customer experience at the heart of their business," he said.