Britain's licensed premises “closing at more than one an hour”, study claims
Outdoor trading from mid-April is expected to offer little benefit.
Nearly 12,000 licensed premises have closed in Britain since December 2019, an average of around 30 a day and the highest rate on record, data from the new edition of the Market Recovery Monitor from CGA and AlixPartners revealed.
The study explained that whilst 4,170 new sites have been recorded since December 2019, the loss of 11,894 venues means there have been nearly three closures for every fresh opening—leading to a net loss of 7,724 licensed premises.
Research for the Monitor also suggests that the freedom to trade outside from mid-April will be of “limited benefit”, with 43.2% of England’s pubs, bars and restaurants have an outdoor area of some kind. Whilst the number is higher among food pubs (78.4%) and community pubs (71.0%), it is far lower on high streets (25.6%) and among casual dining restaurants (11.4%).
“These numbers set out the full, devastating impact of the pandemic on Britain’s licensed premises,” said Karl Chessell, CGA’s business unit director for hospitality operators and food, EMEA. “The wipeout of Christmas trade was clearly the final blow for many businesses, and the long wait that others now face to open their doors sadly means closures will mount even higher.”
The food-led sector has been hit harder by COVID-19 than the drink-led market, losing 7.6% and 5.5% of total sites respectively. The casual dining sector, meanwhile, contracted by 15.8%—equivalent to more than 1,000 casual dining restaurants, or nearly one in six of the total, shutting their doors since December 2019.
The report also pointed to resilience in some areas, with central Sheffield, Liverpool, Edinburgh and Nottingham all losing fewer than 3% of their licensed premises since December 2019, and the London market trimmed by a below-average 6.3%.
“There is huge pent-up demand for hospitality among consumers, and it is encouraging to see signs of resilience in the sector,” said Chessell. “Pubs have proved more durable than restaurants in recent months, and outside service will give many of them a useful kickstart if the sun shines. Amid all the closures, it’s also encouraging to see a steady flow of new entrants to the market. We remain very confident about the long-term future of the sector, but unfortunately there is more pain to come first.”
AlixPartners' managing director Graeme Smith added: “The rapid acceleration in site closures since the start of the year demonstrates just how brutal the situation is. Businesses are burning through cash at an alarming rate as costs stack up, and within the sector there is despair as to why hospitality is at the back of the queue when it comes to reopening. The Budget is absolutely crucial to the future survival of thousands of sector businesses; a substantial package of financial support is needed to prevent greater numbers of closures across this year and beyond.”
