There was a 0.1% drop in sites in the 12 months to December 2018, according to the Market Growth Monitor from CGA and AlixPartners.
This followed a five-year boom in managed restaurant openings across the country. There were still 5,780 sites managed by groups trading in December 2018, representing an overall 27% rise in new openings since 2013.
“The boom in managed restaurants has been one of the British economy’s great success stories of the past decade,” says CGA vice president Peter Martin.
“But after a string of closures and CVAs in the casual dining sector in the last 12 months, the sector is now in net decline—albeit a very modest one. We can expect to see further contraction in numbers over the course of 2019.”
Outside London there was a 0.9% drop in the number of managed restaurants in the year to December 2018, compared to a 1.5% rise within the M25.
High streets saw a 1.1% fall, while suburban areas recorded 2.2% growth.
Kate Nicholls, CEO of UKHospitality, says: “[There] is underlying health in the sector...in keeping with the pub segment of the market there will always be churn, but accompanied by constant innovation and headroom for growth for differentiated, invested brands that focus on providing a great customer experience.
“However these figures should be a warning sign to government that many hospitality businesses are struggling with increased costs and falling profit margins. Urgent action is needed to reform business rates now, stimulate investment in jobs and training through reforms to National Insurance, and provide certainty for business investment with a Brexit deal."
