800 licensed premises lost in final quarter of 2023

The figure is equivalent to 803 net closures in three months, or nearly nine per day. It represents an acceleration of closures from the third quarter of last year, when numbers fell by only 0.3% — but it is much healthier than the average of 24 closures a day that the Monitor recorded in mid-2022, when post-Covid business failures were at a peak.

“Given all the pressures on hospitality in recent months, it is no surprise to see more contraction in site numbers in late 2023,” says Karl Chessell, CGA by NIQ’s business unit director - hospitality operators and food, EMEA.

This latest data comes after a report by full-service law firm Shakespeare Martineau earlier this week revealed that the number of hospitality businesses filing for administration has nearly doubled in two years​​.

The Hospitality Market Monitor from CGA and AlixPartners shows Britain had 99,113 licensed premises at December 2023 — nearly 3,000 fewer than 12 months earlier, and 16,000 fewer than at March 2020, the point at which Covid-19 arrived in Britain. The independent sector has been hit particularly hard, with numbers falling by a sixth (16.6%) since early 2020.

“Prevailing economic conditions meant 2023 was a difficult year for many hospitality and leisure businesses,” says Graeme Smith, AlixPartners’ managing director.

“However, it was and clearly remains an uneven market. Well capitalised, well-run establishments in resilient parts of the market enjoyed continued growth through 2023, whereas smaller independent businesses struggled to absorb the increase in operating costs.”
 
The latest edition of the Hospitality Market Monitor has a special focus on the pub sector, where figures show the number of premises has plunged by 43.6% over the last 20 years. It indicates that food-led pubs have been relatively resilient, with a 7.6% drop since March 2020; while community and high street pubs have dipped by 11.8% and 11.2% respectively.

This reflects the long-term shift in the way people use pubs, according to the Monitor, and a change in focus from drinking out to eating out.

Managed pub groups have achieved growth of 4.2% in that time, while independents (down 14.1%) and leased operators (down 14.4%) have found it harder to recover from Covid lockdowns.

“While the long-term headline-grabbing pub closure rates are on the face of it shocking, they speak to a societal shift, from drinking-out to more food-led occasions,” continues Smith.

“This has happened amid a 20-year structural expansion in food venues across the country. It is a hospitality mega-trend of the first quarter of this century.

“The other material shift in behaviour in recent times is that of young consumers moving away from large late-night venues, which has left this segment of the market facing a challenge to adapt.”

Chessell adds that more closures can be expected in the coming months as inflation and labour issues continue to put strain on businesses, and independent operators are particularly vulnerable.

This is evidenced in many of the closures reported in the first month of 2024, with several high-profile independent restaurants permanently shutting their doors amid insurmountable cost pressures.

They include Simon Rimmer’s Didsbury restaurant Greens​​; Tony Rodd’s Copper & Ink restaurant in Blackheath​​, south east London; James Allcock Yorkshire bistro The Pig and Whistle in Beverly​​; and Phill and Deb Lewis’ sustainability-focused Cardiff restaurant Kindle​​.

Chessell also goes on to say that CGA’s data points to 'solid trading' for managed pubs, bars and restaurants, with likely drops in inflation and interest rates hopefully easing costs and loosening people’s spending as 2024 goes on. 

“Whether or not this leads to a slowing of closures and a trigger for new openings remains to be seen,” he says.