Hospitality loses one venue per hour in Q3 as inflation bites
Britain’s hospitality sector saw 2,200 venue closures in the last three months, equivalent to one per hour, the latest Hospitality Market Monitor from CGA and AlixPartners has revealed.
Data shows there were approximately 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. The decline leaves the licensed market with a 9.9% drop in sites since March 2020.
The closures over the last quarter follow a sharp rise in prices in energy, food and labour, a trend which looks likely to continue over the rest of 2022 as a lack of government support plunges businesses into uncertainty.
Managed hospitality groups and independent operators saw a sharp contrast. The number of managed sites is 3.0% below pre-COVID levels, but increased by 0.9% (+179 sites) in the last three months. The independent sector, however, is down by 2.6% (-1,751 sites), highlighting the greater resources and buying power of larger businesses.
Karl Chessell, CGA’s business unit director for hospitality operators and food, EMEA, said: “These numbers show how hospitality’s steady recovery from COVID is now under severe threat from rising costs for businesses and consumers alike.
“The resilience and confidence of managed groups and their investors is impressive, and people’s appetite for eating and drinking out is undimmed. However, thousands of smaller businesses are now on a knife-edge and in need of financial support. Relief on energy bills has been welcome, but sustained backing and clarity of policy is needed if hospitality is to power the economic growth that the government is chasing.”
Britain’s number of nightclubs has fallen by 5.6% in the last three months alone, according to CGA’s market monitor, and the sector now has around a quarter fewer sites (-309 sites) than it did before the pandemic in March 2020.