According to figures from the latest CGA AlixPartners Market Recovery Monitor, the number of licensed premises before Prime Minister Boris Johnson called last orders across the UK on-trade on 20 March stood at 115,108 – a 2.4% year-on-year drop equating to almost 3,000 venues.
With the vast majority (81%) of hospitality business leaders already immersed in recovery planning ahead of potential reopenings on 4 July according to CGA’s Business Confidence poll, UKH chief executive Kate Nicholls explained that the Market Recovery Monitor’s latest findings provided a “useful starting point” and illustrate a market that was already under pressure as the country moved into lockdown.
“Our own data reveals that the sector experienced a sales decline of 21.3% in the first quarter of 2020,” Nicholls explained. “Hospitality was hit first, has been hit hardest and will take longer than most to recover.
“Our new #FAIR4Hospitality campaign calls on Governments across Britain to invest in a fair and timely return for hospitality this summer, for the benefit of local communities, people’s jobs, national wellbeing and the economy.
“How the sector restart, and at what pace, will vary dependent on type of business and Government guidance so these figures will be useful on an ongoing basis for all those invested and passionate about our sector.”
As reported by The Morning Advertiser (MA), UKH recently released guidance to help hospitality businesses safely reopen post-lockdown, including advice on in-depth cleaning regimes and adhering to distancing rules.
“Hospitality is ready, with the right support, to play a leading role in the recovery, can help rebuild shattered consumer confidence and bring the nation back together safely over the coming months,” Nicholls added.
Everything in the air
While the independent sector currently accounts for the largest portion of the UK’s 115,108 licensed premises – comprising almost two thirds of the total with 74,271 sites – it shrank by 2.6% in the year to March 2020, according to CGA and AlixPartners’ data.
What’s more, the number of pubs and bars decreased by 1.5% during the same period with the leased pub segment declining by 5.5% to 19,376 and community pub numbers slipping by 3.7% last year.
Conversely, group-owned and managed sites saw a 1.6% uplift in numbers to 21,461 during the past 12 months while managed food pubs grew 2.2%, bar numbers rose by 13.1% and managed community pubs saw a 1.4% uplift over the same period.
Discussing the findings in the context of the ongoing pandemic, CGA group CEO Phil Tate said: “While corporate investment has sustained growth programmes to date, the Covid crisis has thrown everything in the air.
“The question is whether the bigger corporate players will be best placed to emerge, post-lockdown, still in a relatively strong position?
“Will independents continue to struggle, or will it be the medium-sized groups, especially in the casual-dining arena, that will be squeezed the most?”
Uncertain demand levels
CGA’s Tate added that how the overall hospitality sector reopens will be dependent on a range of factors, including Government timetables, support and continuing restrictions, the financial strength of individual businesses, wider economic and business activity, the creativity of management teams, and the willingness of customers to return.
What’s more, AlixPartners managing director Graeme Smith explained: “Restarting a business in a market where demand levels are uncertain and significantly below previous levels is not sustainable without further support from key stakeholders and the Government.
“While the extension of the furlough scheme is welcome, operators will be working closely with their investors, lenders and landlords to help them navigate this crisis.”
As previously reported by MA, the latest CGA Business Confidence Survey revealed that just 36% of hospitality business leaders are predicting life after lockdown for all of their venues once Covid-19 trading restrictions are lifted.
The survey of 120 hospitality executives working at CEO, chair and director level by CGA and hospitality technology specialist Fourth also found that almost all respondents expect to see a more sparsely populated post-lockdown landscape – with somewhere between 70% and 80% of pubs, bars, restaurants, late-night venues and hotels expected to resume trade.
“Many operators have got their tape measures out to assess the impact of social distancing restrictions on operations and capacity,” Smith continued.
“Even with well-configured space, cover counts will be meaningfully reduced and may prompt further questions on whether it is sensible to reopen, or not, from a profit perspective.
“Location considerations will be another factor – it’s easier to foresee rural and suburban venues opening faster than those located in large city centres given there will be a significant period before offices reopen and footfall numbers return to prior levels, particularly where mass-transit is key for commuters.”
• Read the latest digital edition of The Morning Advertiser – for free – by clicking here.