Unlocking Word Meanings
Read the following words/expressions found in today’s article.
- insolvent / ɪnˈsɒl vənt / (adj) – relating to a person or company that has no sufficient funds to continue doing business
The company became insolvent after paying a multimillion-dollar fine.
- close down / kloʊz daʊn / (phrasal) – to permanently stop the operation of something
His business closed down because he could not manage it well.
- oversaturated / ˈoʊ vər ˈsætʃəˌreɪ tɪd / (adj) – relating to a setup where products or services are abundant, but there are only a few consumers
The high tax on electronic goods resulted in an oversaturated market.
- shakeout / ˈʃeɪkˌaʊt / (n) – a situation when businesses stop and companies let go of their employees
It is hard to find a job now because of the industry shakeout.
- in business / ɪn ˈbɪz nɪs / (idiom) – continuing to do operations normally
After being in business for two years, the burger joint finally decided to expand.
Read the text below.
Over 1,400 restaurants in the United Kingdom have become insolvent, signifying a crisis in the country’s restaurant industry, according to a recent report.
The report, published by accounting and consultancy firm UHY Hacker Young, found that the number of restaurants that closed down from January to June this year is 25% higher compared to last year’s figures.
According to the report, the restaurant industry crisis might have been caused by several factors. One is the rapid growth of casual dining in the United Kingdom since 2008. This caused the middle-market to become oversaturated, which prompted well-known restaurants to experience massive shakeouts. Hundreds of small-time UK restaurants were likewise affected.
Aside from the oversaturated market, the firm cited other factors such as the decrease in consumer spending and the increase in food costs. Political uncertainties and the falling value of the British currency are believed to be the root of those factors.
According to UHY Hacker Young, the top 100 restaurants in the United Kingdom have acquired £82 million in losses last year. Over time, a number of well-known restaurants have even filed for bankruptcy and ultimately closed down.
Last year, renowned burger chain Byron closed some of its branches. Then, earlier this year, celebrity chef Jamie Oliver’s restaurant chain reportedly collapsed, leaving hundreds of its workers jobless.
An expert advised that struggling restaurants should aggressively manage finances as bank loans may not be a feasible option to solve their financial woes. Industry specialists believe that after this crisis, only restaurants with unique offerings and several loyal customers will stay in business.
Enjoy a discussion with your tutor.
• What are the possible effects of the restaurant industry crisis on the UK economy? Discuss.
• What do you think can be done to solve the restaurant industry crisis in the United Kingdom? Discuss.
• What is the importance of tracking consumer spending habits? Discuss.
• What things or services do people usually stop spending on when their budget becomes tighter? Explain.