Restaurant closures slowing could mean return of business confidence: report
Britain’s number of licensed premises has fallen by 3.6% over the last 12 months.
For the first time, the Hospitality Market Monitor from CGA by NIQ and AlixPartners saw the number of licensed premises drop below 100,000.
This is a 3,766 drop over the 12 months and is equivalent to more than 10 net closures every day.
However, the report said that despite the 3.6% drop in Britain’s licensed premises, the pace of venue failures has slowed as the year has gone on. The Hospitality Market Monitor recorded a fall in licensed premises over the third quarter of 2023 of only 0.3%—equivalent to just under three net closures a day.
The report from CGA and AlixPartners flags a particularly robust quarter for the managed hospitality sector. In the three months to September 2023, this segment achieved 0.5% growth, in contrast to a 0.6% drop in the number of independently-run venues. Many of Britain’s biggest city centres also saw a net quarter-on-quarter increase in sites, including London, Manchester and Edinburgh.
According to Karl Chessell, CGA by NIQ’s director - hospitality operators and food, EMEA, though it is pleasing to see a slowdown in closures over the third quarter of 2023, whether it is the beginning of a sustained positive trend or a lull remains to be seen.
High inflation and interest rates are keeping a lid on consumer confidence, but the healthy growth in venues from multi-site managed groups is a positive sign of confidence from business leaders and investors. Despite the contraction in size in recent years, the long-term outlook for hospitality remains very good,” Chessel said.
Meanwhile, AlixPartners’ managing director Graeme Smith said that analysing the data in-depth reveals that whilst the sector has contracted overall, this masks an evolution of the market as it has become more varied and more innovative.
“In addition, the standard of offer across the full spectrum of the hospitality industry has never been higher. Recent figures show that the contraction in site closures has slowed, this comes after a period of significant estate consolidation. It also marks a period when many operators have tentatively returned to the expansion trail, coupled with the continued entry of new concepts and international brands into the sector. If consumers continue to spend on hospitality and experiences in the face of more challenging economic conditions, we could see site numbers begin to expand again in 2024,” Smith said.