Mixed outlook for hospitality as 800 restaurants closed in Q4 2023
The pub sector was hit harder than most.
Britain’s number of licensed premises dropped by 0.8% in the fourth quarter of 2023, the latest Hospitality Market Monitor from CGA by NIQ and AlixPartners reveals.
This represents 803 net closures in three months or nearly nine closures per day. According to the report, this rate of closures is an acceleration of closures from the third quarter of last year, when numbers fell by only 0.3% however this is still better than the average of 24 closures per day at the same period in 2022.
The Hospitality Market Monitor from CGA and AlixPartners shows Britain had 99,113 licensed premises at December 2023—nearly 3,000 fewer than 12 months earlier, and 16,000 fewer than at March 2020, the point at which COVID-19 arrived in Britain. The independent sector has been hit particularly hard, with numbers falling by a sixth (16.6%) since early 2020.
The pub sector saw the number of premises plunged by 43.6% over the last 20 years. It indicates that food-led pubs have been relatively resilient, with a 7.6% drop since March 2020, while community and high street pubs have dipped by 11.8% and 11.2% respectively. This reflects the long-term shift in the way people use pubs, and a change in focus from drinking out to eating out. Managed pub groups have achieved growth of 4.2% in that time, whilst independents (down 14.1%) and leased operators (down 14.4%) have found it harder to recover from COVID lockdowns
“Given all the pressures on hospitality in recent months, it is no surprise to see more contraction in site numbers in late 2023. More closures can be expected in the coming months as inflation and labour issues continue to put strain on businesses, and independent operators are particularly vulnerable. However, CGA’s data points to solid trading for managed pubs, bars and restaurants, and likely drops in inflation and interest rates will hopefully ease costs and loosen people’s spending as 2024 goes on. Whether or not this leads to a slowing of closures and a trigger for new openings remains to be seen,” Karl Chessell, CGA by NIQ’s director – hospitality operators and food, EMEA said.