Shut Down Point in Action: Jamie Oliver Closes 6 Restaurants

Here is a good contextual example of the shut-down point in action. Six of the 42 Jamie's Italian restaurants are to close down with the business citing rising variable costs caused by the slump in the pound as a key factor hurting profitability.

Each restaurant in the chain needs to attract 3,000 diners a week to be profitable. This hints at the substantial fixed costs of high street commercial rents and other overheads.

Cynics might respond by suggesting that the restaurant sector is increasingly crowded and the rapid expansion of home-delivery businesses such as Hungry House and Deliveroo is putting pressure on restaurant chains to fill their seats.