It shows there were just under 104,000 licensed premises at the end of September 2022 — a net drop of 2,230 since June, which represents an average of just over 24 closures a day, or more than 150 per week.
This latest decline leaves the licensed market with 11,426 (or -9.9%) fewer sites than March 2020.
It follows a year of relative stability as hospitality built back from the pandemic, with the number of sites at June 2022 virtually the same as 12 months earlier. The closures over the last quarter follow a sharp rise in prices in energy, food and labour, and this trend looks likely to continue over the rest of 2022 without further government support.
“These numbers show how hospitality’s steady recovery from Covid is now under severe threat from rising costs for businesses and consumers alike,” says Karl Chessell, CGA’s business unit director for hospitality operators and food, EMEA.
The report from CGA and AlixPartners reveals a sharp contrast in the fortunes of managed hospitality groups and independent operators.
While the number of managed sites is 3.0% below pre-COVID levels it increased by 0.9% (+179 sites) in the last three months, but the independent sector contracted by 2.6% (-1,751 sites). It reflects the greater resources and buying power of larger businesses compared to smaller firms, many of which are now very fragile.
In contrast to the managed-independent divide, the trend of steady closures over the last quarter has been notably consistent across different locations. High street, suburban and rural locations all recorded same net decline of 2.1% in licensed premises between June and September.
By region, quarter-on-quarter declines varied only slightly, from a low of 1.6% in the south and south east to a high of 2.9% in Scotland.
It is truly saddening to see this scale of losses over the last quarter. It’s not just the sites that the industry loses but the fantastic people involved and the huge value they add to the cultural and social fabric of a local community.
“Unfortunately, it is no longer a shock to see these high numbers of losses and it has become all too common an occurrence as businesses battle soaring energy costs, worker shortages and a cost-of-living crisis dampening consumer confidence,” says Kate Nicholls, chief executive of UKHospitality.
“[We] forecast this summer that we could lose 10% of the industry if adequate support was not offered and it would appear that prediction is bearing true.
“Prior to the pandemic, hospitality was the only sector due to generate real term growth and before the energy crisis hit it was forecast to grow 3%.
“It’s clear the economy needs hospitality to be firing on all cylinders and, while the Government’s energy support package was very welcome, there now needs to be considered and urgent action to ensure businesses can survive. This should include business rates reform and lowering the rate of VAT.
“There is no time to waste – once these businesses are gone, they are gone for good. This scale of losses cannot continue – it must be avoided at all costs.”
The Monitor also highlights an ongoing contraction in the nightclub sector. Britain’s number of nightclubs has fallen by 5.6% in the last three months alone, and the sector now has around a quarter fewer sites (-309 sites) than it did before the pandemic in March 2020.
