Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Britain’s number of licensed premises contracted in the first quarter of 2022, the latest Market Recovery Monitor from CGA and AlixPartners reveals.

pub pint

It indicates that Britain had just under 106,000 licensed premises at the end of March 2022 — 0.9% short of the number of premises recorded for the final quarter of 2021. Worringly, drink-led community pubs saw numbers trimmed by 1.5%.

While this small decrease does represent a slowdown in the rate of closures since the start of the pandemic, sharp rises in energy, food, and labour prices, the end to VAT relief, and the expiration of the moratorium on landlord action mean many fragile hospitality businesses remain at risk of closure in the months ahead.

The research from CGA and AlixPartners reveals contrasting patterns of openings and closures across the industry. The last two years in hospitality have shown a sharp divide in trends between independent and managed operators. While there is evidence that this divergence is narrowing, conditions remain harder for smaller businesses without the financial reserves of some bigger pub, bar, restaurant, and hotel groups.

In the first quarter of 2022, the independent sector saw a net decline of 1% of venues when compared to the previous quarter’s figures. This was fractionally ahead of the managed world, which saw a 1.3% net decline in the first quarter of the year.

However, on a two-year measure since the start of the pandemic in 2020, independents’ total site numbers are 8.7% down — a much steeper drop than the 4.8% decline in the managed sector. The inflationary pressures that are besieging hospitality at the moment could exacerbate this trend.

Taking the contraction during the first quarter of 2022 into account, the total British licensed market has 9,200 fewer sites than it did at the start of the pandemic (March 2020), a net decline of 8% of all sites.

Karl Chessell, CGA’s director for hospitality operators and food, EMEA, said: “Two years on from the start of the pandemic, our Market Recovery Monitor confirms the remarkable resilience of many hospitality businesses. Consumer demand and investor confidence remain strong, and it has been encouraging to see a stream of new entrants into the market in early 2022.

“But while they have kept numbers of licensed premises nearly flat on the surface, there is a lot of turmoil going on underneath. Heavy inflationary pressures and staffing and supply issues are making conditions extremely difficult, and we can expect to see a steady flow of both closures and new openings as the year goes on.”

Graeme Smith, a managing director at AlixPartners, added: “While it is encouraging to see a smaller decline in sites than we have in past quarters — and robust performances from some within the industry — the sector is still 9,200 sites lighter than when we entered the pandemic two years ago.

“Now, the significant additional cost pressures could lead to even greater churn, impacting independents, sub-scale businesses, and those with less-than-compelling consumer propositions and weaker brands in particular.

“The moratorium on landlord action also ended at the end of March and, as this expires, it may lead to more closures as landlords seek foreclosure due to unpaid rent. During this extremely challenging time, many businesses will be revisiting liquidity forecasts that may have become out-of-date and reassessing the validity of any capex and new site roll-out plans. Maintaining stability of supply will also be critical, as will be the careful consideration, testing and implementation of strategic pricing options.”