According to the latest Hospitality Market Monitor report from CGA by NIQ and AlixPartners, Britain has seen a decline of 4,593 licensed premises from March 2022 to March 2023. This represents a 4.3% drop in the licensed sector over the same period and an average of 12.6 closures a day. The report also notes that independent businesses have been hit the hardest, with a 5.9% drop in numbers over the last 12 months. In contrast, managed groups achieved growth of 1.5% in the same period, including 0.3% in the first three months of 2023.
The report indicates that net closures have slowed to 756 venues in the first three months of this year, a quarter-on-quarter drop of 0.7%, and equivalent to 8.4 closures a day. This trend reflects the resilience of managed groups, which have seen a slower rate of closures in recent months.
The report also highlights a steep drop in restaurants (down 7.8% since March 2022) compared to food pubs (down 2.2%) and high street pubs (down 2.5%). The nightclub sector has seen a contraction of 30.6% since March 2020, and there has been a slowdown of sports and social club closures, with numbers down 4.8% year-on-year but just 0.3% quarter-on-quarter.
Karl Chessell, CGA by NIQ’s Director – Hospitality Operators and Food, EMEA, expressed concern about the recent cut in government support on energy bills, alongside a hike in minimum wage rates and the ongoing tax burden. He emphasized the need for sustained help to tide the sector through the current crisis. Graeme Smith, AlixPartners’ Managing Director, highlighted the growing divide between larger and smaller hospitality operators and the need for government support to be extended, especially on energy costs, to help small (often family-owned) businesses survive.
Despite the decline in the hospitality sector, there is positivity in the latest analysis of the market, given that the overall rate of decline has slowed significantly. This stabilizing trend extends to major cities such as London, reflecting the return of workers and tourists to urban centers. However, the report underscores the need for sustained government support to help the sector weather the ongoing challenges.
In conclusion, the latest Hospitality Market Monitor report reflects the continued challenges facing the hospitality sector, particularly small, independent businesses. However, the trend of slower closures in recent months and the return of activity to major cities offer hope for the future. Sustained government support, particularly on energy costs, will be crucial to ensure the survival of small businesses and the overall resilience of the sector.
