Over 50,000 licensed venues to stay closed as national lockdown ends

02-Dec-2020 - Last updated on 02-Dec-2020 at 10:47 GMT

Horrible year: 'After what has undoubtedly been an ‘annus horribilis’ for the hospitality sector, in normal times we would not be entering the most important four trading weeks of the year,' says AlixPartners MD Graeme Smith

Some 50,000 licensed outlets may have to remain closed as national lockdown restrictions end today (Wednesday 2 December) and tiered measures begin.

The latest Market Recovery Monitor from CGA and AlixPartners highlighted the challenges facing the hospitality sector, despite the Government’s ‘meagre’ grant support for wet-led businesses.

The research states that just 2,227 licensed venues – 2% of the total – are in tier one areas of England.

More than a third (36,648 – 39%) are in tier three, where venues must close and can only operate a takeaway service.

The remaining 55,502 (59%) are in tier two and are only able to serve alcohol alongside a “substantial meal”.

No guarantee

The Market Recovery Monitor also found just one in 16 of Britain’s licensed venues were trading at the end of November.

CGA business unit director for food and retail Karl Chessell said: “The experiences of Scotland and Wales show a release from lockdown is no guarantee businesses can reopen.

“Despite the end of England’s shutdown, the harsh tiered arrangements means tens of thousands of England’s premises are simply unviable in their most important trading month of the year.

“The longer the system remains in place, the bleaker are the prospects for survival for many of these businesses.”

The Government’s ‘support’ for wet-led pubs, in the form of £1,000 grants distributed by local authorities is unlikely to help the venues survive, according to AlixPartners managing director Graeme Smith.

Annus horribilis

He said: “After what has undoubtedly been an ‘annus horribilis’ for the hospitality sector, in normal times we would not be entering the most important four trading weeks of the year.

“However the overwhelming majority of businesses in this sector are operating under crippling conditions and the Government’s latest offer of additional financial support for wet-led pubs appears unlikely to be sufficient to enable these businesses to survive.

“Figures from UKHospitality suggest the sector could see about £7.8bn of revenue wiped out with the tier system in place, compared to last December.

“Any dreams operators might have had a post-lockdown bounce in England have quickly turned into the nightmare before Christmas as a result of these new restrictions.

“Much attention is being placed on what comes next given the messaging from the Prime Minister that restrictions will likely be in place well into the new year.”