The latest Market Growth Monitor from CGA and AlixPartners found pubs, restaurants, bars and other licensed venues closures fell by 1.8% in the 12 months to December 2019 – the lowest rate year on year for almost two years.
It also showed Britain had 116,203 licensed premises as of December 2019, which represents an average net closure of six sites per day during the past year.
The report found a 2% drop in Britain’s total pub and bar numbers, with food-led sites holding up better than community and drink-led venues, which have seen 4,297 net closures since December 2014.
There was a 1.6% decrease in total restaurants but managed sites of operators with more than one location increased by 1.8% in the year to December.
Optimistic prospects
CGA business unit director for food and retail Karl Chessell said: “While the licensed sector continues to contract, our latest Market Growth Monitor also shows reasons to be optimistic about prospects for 2020.
“We are still seeing unsustainable pubs close but, collectively, the rate of net number of pub, bar and restaurants closing is slowing.
“Last year was not easy for some big restaurant brands but smaller and medium-sized brands are bringing new concepts to the market and successfully scaling up. All our research shows consumers are still eager to go out and eat and drink.”
Taking a deeper dive into the data, the monitor revealed seaside towns saw a collective drop of 5.8% in the 12 months to December – more than three times the British average. Downward movement has been steepest in Blackpool where 10.8% of licensed premises have shut.
However, the monitor has also highlighted positive trends in many pockets of the country including Manchester and Liverpool, which have pushed their numbers up by about a fifth (20%) in the past five years.
Investment activity
Chessell added: “The contrast between Britain’s big cities and seaside towns couldn’t be starker. Resorts where restaurants, pubs and bars once thrived have suffered serious hardships with independents particularly hard hit.
“But the night-time economy in many of our regional hubs continues to flourish with consumers drawn by some distinctive and vibrant operators who know their cities inside out.”
AlixPartners managing director Graeme Smith said the eating and drinking-out market remained dynamic and attractive to investors, with this very much in evidence across past year where pubs and experiential businesses took up the slack in investment activity from the more subdued restaurant sector.
He added: “Reduced political uncertainty, more positive recent trading results and encouraging returns when investing in sites provide a platform for increased merger and acquisition activity in 2020 across wet-led and food-led concepts. However, investors will be looking carefully at what the impact on trading will be from the recent coronavirus outbreak.
“This edition highlights a regional success story in the return to sustained growth of managed restaurant groups (against single-site independents), driven by innovative local operators in major cities across the UK.
“What sets many of these businesses apart is their experience and deep understanding of what works for different customer groups in their local area.”
