Tough fourth-quarter trading threatens to dent uptick in hospitality openings

By James McAllister

- Last updated on GMT

Tough fourth-quarter trading threatens to dent uptick in hospitality openings

Related tags: Licensed premises, Market report, Cga, Coronavirus

Britain’s hospitality sector grew modestly in the last quarter of 2021, according to the latest Market Recovery Monitor, but tough trading conditions now threaten to halt the upturn.

The Monitor, published by CGA and AlixPartners, recorded a 1.6% increase in site numbers between September and December 2021 — the first quarter-on-quarter growth for more than five years.

It highlights particularly encouraging growth of 1.8% in the number of independent venues, which have been vulnerable to closure during lockdowns and restrictions since early 2020. The report also indicates a 1.9% increase in venues in both city centres and on high streets, where footfall has suffered since the start of the pandemic.
However, the Monitor emphasises Covid-19’s damage to hospitality and reveals the fragility of the sector’s recovery. Britain now has more than 8,000 fewer pubs, bars, restaurants and other licensed venues than in March 2020—equivalent to a net loss of around 13 sites a day. 

Despite fourth-quarter growth, the future of more hospitality businesses is now under threat after a collapse in sales over Christmas and New Year, as concerns about the Omicron variant spread and fresh restrictions were introduced in Scotland and Wales, affecting over 16,000 sites – equivalent to 15% of the GB licensed market.

The sector also faces a host of operational pressures, including rapidly rising food and energy costs, staff shortages and supply problems.

“The increase in sites over the last three months of 2021 shows the remarkable resilience and entrepreneurialism of hospitality, and the enduring appeal of Britain’s pubs, bars and restaurants," says Karl Chessell, CGA’s business unit director for hospitality operators and food, EMEA.

"But after disappointing December trading and challenges mounting, both new and established businesses are vulnerable as we begin 2022.

"These positive numbers show how hospitality is ready to kickstart Britain’s post-Covid-19 economy, but without urgent and sustained government support there is a real danger that recovery will stall.”

Related topics: Trends & Reports

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