The owners of the Peach Tree in Abbey Foregate, which opened in 1997, announced the restaurant's closure on Thursday afternoon, saying the decision was taken "with deep regret".
"It is with a very heavy heart that we are today announcing that The Peach Tree Restaurant Ltd has had to cease trading with immediate effect," a statement by Paul Monahan from The Peach Tree Restaurant Ltd said.
"The restaurant has been making substantial financial losses on a weekly basis throughout this year, and despite the best efforts of the management and team, it has got to a point where we are no longer able to trade."
The closure of the restaurant has been put down to a number of reasons.
Mr Monahan continued: "The massive impact of Covid on all hospitality venues; the huge difficulty in recruiting competent and proficient staff and management members since Brexit; the significant rise in energy costs and food prices; and the considerable impact of the financial instability created by the mini-budget in September. Frankly, we have now run out of time in which to turn things around.
"It has unquestionably been the most stressful year we have ever known, and we are fully aware that a lot of other hospitality venues face exactly the same stresses and strains on their business. Despite our best efforts, The Peach Tree operation has been a shadow of its former self since the venue reopened after Covid - and indeed running at 40 per cent lower sales this year than pre-pandemic 2019 levels.
"This unavoidable decision couldn’t have come at a worse time, with a fully-booked Christmas season of parties starting next weekend. We have tried our very best to fulfill our commitment to those people who had chosen to celebrate Christmas with us, and cannot apologise enough for the disappointment and inconvenience this will undoubtedly cause."
Mr Monahan said the team was "totally gutted" at the failure of the business.
He added: "We truly hope that someone will come along to breathe new life into this remarkable venue in Abbey Foregate and return it to its former glory. Any interested parties should contact Halls in Shrewsbury."
Earlier this year the timber-framed building housing the restaurant, which is located within a parade of Grade II listed properties and contains parts thought to date back to the 15th century, was put up for sale.
Any customers with future bookings at the restaurant will be contacted over the coming days.
Havana Republic, the Cuban-inspired cocktail bar that's intertwined with The Peach Tree, will remain open.
In a message to employees in his statement, Mr Monahan said: "I would like to thank all the staff, both past and present, for all their hard work and dedication, together with all the customers who have enjoyed their Peach Tree experience over the last 25 years. It certainly is the end of an era."
The Peach Tree and Havana Republic are listed with property experts Halls with a guide price of £1.8 million.
Its listing says: "The building comprises two branded venues located within a parade of Grade II listed properties with parts of the timber framed buildings thought to date back to the 15th century.
"The trade areas are located over two stories (sic) and separated into a number of rooms allowing the business to accommodate greater numbers of customers during peak trading times whilst still retaining an intimate atmosphere during quieter periods." To see more visit Halls GB.