12.6 venues lost per day in 2022

Britain suffered a net decline of 4,593 licensed premises in the last year to March 2023, the new Hospitality Market Monitor from CGA by NIQ and AlixPartners has revealed.

This drop is equivalent to 4.3% of the licensed sector since March 2022, and an average of 12.6 closures per day. However, net closures slowed to 756 venues in the first three months of 2023 – an average of 8.4 closures per day.

Karl Chessell, CGA by NIQ director of hospitality operators and food EMEA, said each of the closures represented a sad loss of jobs and the permanent withdrawal of a community asset.

However, he believed it was encouraging the losses slowed in the first few months of the year. For Chessell, this was a “welcome indicator” demand for hospitality remained strong.

This was echoed by AlixPartners managing director Graeme Smith, who believed while the number of pubs, restaurants and other licensed venues continued to contract in UK hospitality, there was some positivity in this latest analysis of the market, given that the overall cadence, or rate of decline, has slowed significantly. 

Independent struggle

Independent businesses​ have borne the brunt of closures with a 5.9% drop in number over the last 12 months, while managed groups achieved growth of 1.5% in the same period, including 0.3% in the first three months of 2023.

Venues that have shut include Top 50 Cocktail bars​ the Pineapple in Birmingham and Nottingham-based site Cottonmouth, with the former citing energy bills as the “straw which broke the camel’s back”.

JD Wetherspoon also announced it would sell 32 of its pubs​ last year, and most recently closed the doors of its Essex-based site the World’s Inn, Romford.​

In the three years since the start of the pandemic, the independent sector has shrunk by 14.1%, more than four times the contraction of 3.3% in the managed sector.

This reflects both the vulnerability of small, mostly family-run businesses in the face of Covid and the cost-of-living crisis, and the resilience of better resourced pub, bar, restaurant and hotel groups.

Chessell warned the recent cut in government support on energy bills, alongside a hike in minimum wage rates and the ongoing tax burden, leaves thousands more fragile venues at risk of closure.

“Hospitality has shown how, with the right backing, it can generate jobs and fire the economy,” he added, “but sustained help is needed to tide the sector through the current crisis.”

Dropping numbers

The report also revealed a much steeper drop in restaurants (down 7.8% since March 2022) than food pubs (down 2.2%) and high street pubs (down 2.5%).

What’s more, there’s been a 30.6% contraction in the nightclub sector since March 2020.

Smith said on a 12-month view, the number of closures was “very significant”. He continued: “A statistic homing into view is that by the end of the year, the total number of licensed venues is likely to fall below 100,000 for the first time in many decades.

“It reflects approximately 13,000 closures since March 2020, and the many thousands of pubs that have shut in the decades prior.  

 “This is a trend that speaks to the relative shift from high-frequency drinking occasions, which have in part made way for the growth in (less frequent, higher spend) dining-led visits, and the rise, in recent times, of (less frequent, higher spend) competitive socialising occasions.”