Nearly 1,000 Licensed sites lost since July with Edinburgh bearing the brunt in Scotland

red-g99aac37bb 1920

October’s Market Recovery Monitor from Alixpartners CGA has revealed that the hospitality industry in Britain is almost 1,000 sites lower at the end of September than it was in July.

The report said that the net closures figure of 980 sites or 0.9% – an average of 16 a day – shows that the hospitality industry remains under severe pressure from the effects of the pandemic and a range of operational challenges.

Although closure patterns are similar across Britain, there are some differences in site numbers in Britain’s ten biggest city centres. Manchester and Glasgow have lost fewer than 1% of their licensed premises since July, while three city centres—Edinburgh, Birmingham and Nottingham—have lost more than 2%.

The report found that the rate of closures has slowed from the peaks of last summer and early 2021, but difficulties continue in key parts of the market, like the independent and late-night sectors. Challenges have been intensified by severe operational difficulties including shortages of labour and disruption to supply—both of which have come at the worst possible time for businesses that have not long returned.

The latest report highlights the plight of nightclubs during the COVID crisis. Despite being able to trade from July, Britain’s number of nightclubs dipped by nearly 100 to just over 1,000 by September – a drop of 9.0% in just two months.

The data also indicates that small businesses have seen the highest rate of closures. Independently run pubs, restaurants, bars and other licensed premises accounted for nearly three-quarters of all closures between July and September, reducing the independent sector in size by 1%. In contrast, the managed sector achieved a small increase in site numbers of 0.1%.

Graeme Smith, Managing Director, AlixPartners said, “These figures are a stark reminder, if needed, that the full lifting of restrictions in July did not signal an end to the challenges faced by hospitality businesses. The summer was characterised by issues around labour shortages and supply chain complications, which have run into the autumn and show little sign of easing in the short term.

“While many groups are reporting robust sales and strong consumer demand, the fact remains that inflationary pressures are squeezing margins and operational costs are escalating.”Combined with this month’s VAT increase and the end of the furlough scheme, operators face renewed headwinds that offset some of the optimism from strong demand as the key festive trading period approaches.

“Analysis of closures over the past 18 months reveals how the pandemic has been largely indiscriminate and inflicted significant damage across the board. Outlets of all quality, from city-centre fine dining venues to local community pubs, have borne the brunt and the market has shrunk by almost 10,000 sites when compared to pre-COVID times.

“This shakedown does, however, present a host of opportunities for a select group of ambitious operators. There are genuine prospects to accelerate growth during this period through opportunistic expansion or acquisitions, and conversations with investors show a healthy appetite for deal activity.”

Share:

Category: Coronavirus, News
Tags: , ,
Menu