'Significant' number of licensed venues will not reopen in April

According the latest edition of the Market Recovery Monitor, around 41,100 premises in Britain have a garden, terrace, car park or other area in which they could potentially seat guests—38.2% of all sites.

Numbers fluctuate widely between segments of the market, with four in five (80.5%) community pubs in England able to offer beer gardens, patios or other outside space, compared to just 11.9% of casual dining restaurants.

A significant number of these sites are unlikely to trade from mid-April, because the limitations of their space and the costs of equipping and staffing them will make it impossible to trade profitably. As a result the number of sites reopening will probably be much lower, especially if the weather is poor.
 
Scope for outside trading also varies substantially by region. In the largely rural south west of England, just over half (51.1%) of sites have outdoor space, but the number is below a third in London (33.1%); in Wales, where hospitality is still awaiting a confirmed reopening date, two in five (42.1%) sites have outdoor space; and in Scotland, where venues may open outdoors from 26 April, fewer than a quarter (22.9%) have that capability.

“With huge pent-up demand for hospitality and consumers’ confidence rising, outside trading could give sales a useful kickstart—but there are a lot of variables at play," says Karl Chessell, CGA’s business unit director for hospitality operators and food, EMEA.

"Pubs with beer gardens will be popular if the sun shines, but some restaurants may find it harder to recoup the costs of reopening, especially if the April weather isn’t favourable.

"Well over half of licensed premises have no space at all in which to trade, though they could yet reopen in April if local authorities take a proactive approach and open up street space to serve on.”

While the latest Monitor reflects on the seismic impact of the Covid-19 pandemic on the sector one year on from the start of the first national lockdown, there are also signs of durability and resilience, particularly in the big cities.

Five big regional hubs—Bristol, Liverpool, Nottingham, Edinburgh and Sheffield—have all lost fewer than 3% of their licensed premises since March 2020, while many smaller cities including Plymouth, Aberdeen, Worcester, Exeter and Swansea have all lost more than 10%.
 
This suggests that the UK’s largest cities may be better placed than smaller cities and towns to rebound over the remainder of 2021, despite the collapse in footfall from office workers and tourists over the last year.

“We’ve seen a spate of operators announce plans to reopen for outdoor service on 12 April, and while it’s unlikely to be profitable for the majority to do so, businesses will do all they can to maximise their usable space," says Graeme Smith, AlixPartners’ managing director.

"For those that do reopen, managing cashflow will now be of critical importance as work with supply chains begins again, and relationships with suppliers, landlords and other stakeholders will be tested.

"There is potential to drive stronger and more efficient operations on the other side of the pandemic, but the many in the sector will be weighed down by debt for some time to come and will spend the next year and beyond rebuilding their balance sheets and clearing their arrears.

"The overhang of rent liabilities also remains largely unresolved which means that, in spite of the clear pent-up consumer demand that exists, the hospitality sector is far from out of the woods.”