According to the latest figures from CAMRA (Campaign for Real Ale), 21 pubs closed or lost their licenses each week between July and December 2022 in the UK. In addition, UKHospitality found a third of hospitality businesses are cutting trading days right now as a result of the spiralling energy bills. Nightclubs aren’t faring any better, with one nightclub closing every two days, and should this trend continue, forecasts show that every nightclub in Britain will be shut by 2030.
Of course, amid all the doom and gloom, there are anomalies and some operators are performing extremely well and weathering economic storms. But these tend to be those backed by giant corporate funds, or owned by parent companies, and for the business owners and investors involved in those companies, it’s easy to forget what’s happening below them.
Myself and countless others across the sector are seeing a pattern emerge, and it’s a worrying one that will ultimately penetrate all parts of our sector if we don’t resolve the issues now.
Larger corporations with significant parent funds have been able to prop themselves up - and even grow - through this economic downturn, able to afford the buoyancy of having backing, legally and financially, but for every owner who thinks that the economic impact on hospitality has been over-egged, dozens of others are going out of business.
Closures in all parts of sector
It is the independent operators who are struggling in this crisis. The self-funded business owners who have set up their cafes, restaurants, bars and music venues out of passion, and who can’t fall back on investment funds.
In my hometown of Altrincham for example, I’ve seen half a dozen independents close in the past month alone, from all parts of the sector - a French fine dining restaurant, a family-oriented bistro, a karaoke bar, a cocktail bar, an outdoor street food venue, a traditional English cafe, the list goes on.
What’s so eye-opening is these closures have come after the pandemic, after the so-called recovery, and before the catastrophic impact that the withdrawal of energy support will bring next month.
Altrincham is a well known suburb on the outskirts of Manchester city centre. It won The Sunday Times’ Best Place to Live, and has a range of consumers, from very wealthy sportsmen who play at the Manchester’s football clubs, to families, teenagers, kids, retirees and older generations. It’s a hubbub, and not somewhere you would struggle for business. After all, Manchester was found to have the third highest spend in hospitality in the past quarter in the UK, and this spend no doubt spilled out into its suburbs.
But this is a pure example of how the battles taking place in the hospitality sector aren’t selective. They are wide ranging, and are impacting every independent, no matter where they’re based or who their customers are. If this level of closures can happen here where spend is high and recovery is above average, I dread to think what other areas are going through; those in rural towns where consumer spending is sparse or those on the edge of cities already struggling in this cost-of-living crisis.
Diversity disappearing
These polar opposite experiences between large corporates and smaller independents are splitting the sector in two, and there is a real potential of the independent nature of our industry falling away without viable support.
Do we really want a hospitality industry where the only way to be involved is by opening a franchise or entering into a skewed investor ownership agreement? Or do we want to continue to grow a sector that revels in its diversity, where anyone can bring a flavour of their passion to UK high streets, where future Michelin-star chefs have the opportunity to start at grass roots level and hone their skills freely, without the tedium of chain burgers and chicken drumsticks.
I’m of the opinion that this Government is a selective beast. One large, parent-funded chain saying the sector is not suffering as badly as anticipated, is all it takes for those in power to close their workbooks and move on.
As a sector, we have to look beyond our own specific situations, to broaden our outlook and understand the trials and tribulations that others are going through, so that when we are heard, we are heard as one.
