But despite cost cutting measures and a fear of a double dip recession among 31 per cent of the 500 restaurateurs questioned by Aviva in its bi-annual SME Pulse, overall confidence in the economy among members of the restaurant sector is higher than it is in others.
According to latest figures, 20 per cent of restaurant owners are confident that the economy will improve this year, compared with 13 per cent across all SMEs.
David Bruce, commercial product manager at Aviva said: “Confidence among SMEs is as low as it has been since the onset of the recession and many feel they are in real danger of losing their businesses should the economy fail to improve this year.
“The recent spate of failures on the high street confirms that the consumer-facing economy is feeling a particular squeeze at the moment as discretionary spending falls. Despite this, it’s heartening to see an improvement in sentiment from restaurateurs compared to last year."
Discount and diversify
As well as cutting prices and temporary staff, restaurants told Aviva they would consider the following key steps to keep their businesses healthy: Reduce over time and pay (27 per cent), cut the numbers of permanent staff (23 per cent), discount (23 per cent) and diversify (15 per cent).
Bruce said: “Looking ahead, there seems to be little change in the tactics that will be employed by small business owners to improve trading – we can expect further discounting, increased efforts to diversify into new product and service lines, and regrettably a reduction in staff numbers.”