Big rise in 'distressed' bar and restaurant businesses

The number of distressed businesses in the bar and restaurant sector has shot up 92% between the fourth quarter and 2010, and the first quarter of 2011.

A survey by insolvency practitioners Begbies Traynor showed that a total of 186,554 business were experiencing "significant" or "critical" financial problems compared with 161,601 in the first quarter of 2010.

The company said sectors dependent on discretionary spending suffered particularly badly. Year on year, the number of businesses in the bar and restaurant sector rose 68%.

Ric Traynor, executive chairman of Begbies Traynor Group, said: "The figures for Q1 2011 show the number of UK companies facing 'critical' problems has risen year on year with significant increases across the leisure sector in particular.

"Compared with our figures for food retail which show little change, it seems likely that a fall in consumer confidence and spending power driven by anticipated job losses lies at the core of the leisure sector's troubles.

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By Neil Gerrard

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