2020 cost trade 6,000 licensed venues

By Nikkie Thatcher

- Last updated on GMT

Trade data: the statistics found 9,930 sites permanently closed last year with 3,955 opening for the first time
Trade data: the statistics found 9,930 sites permanently closed last year with 3,955 opening for the first time

Related tags: Cga, Legislation, ukhospitality, Kate nicholls, British beer & pub association, Emma McClarkin

The UK lost in the region of 6,000 licensed premises in 2020 - almost three times the number closed in 2019, new figures have revealed.

The latest Market Recovery Monitor from CGA and AlixPartners revealed a net decline of 5,975 sites in 2020 – a 5.1% contraction in the market since the end of 2019 and a 175% increase on the 2,171 drop in sites during the same period.

The research found that 9,930 sites permanently closed last year with 3,955 opening for the first time meaning for every one new opening, there were 2.5 closures – nearly double the ratio of 1.3 in 2019.

When broken down into the different areas of the hospitality trade, the community, food and high street pub segments saw venue numbers fall by between 3.9% and 5.1%.

In the casual dining sector, the numbers were even starker where total site numbers dropped by 9.7% in 2020 and 3.8 permanent closures for each new opening.

CGA business unit director for hospitality operators and food EMEA Karl Chessell said: “With stop-start trading for much of 2020 and a widespread shutdown during what should have been a bumper Christmas, nearly 10,000 licensed venues have not been able to make it through and it is sadly inevitable thousands more casualties will follow.

“After such a bleak Christmas, it is difficult to be optimistic about the market. But consumers are desperate to get back to eating and drinking out and we can be confident footfall and sales will return when the sector can finally reopen.

“In the meantime, the case for Government support over the next few months is urgent and compelling. There are better days to come but the sector will be in survival mode for some time yet.”

Survival plan

AlixPartners managing director Graeme Smith said the number of venues shutting their doors has had a big impact but this could mean a number of acquisitions will take place as a result.

“The wave of closures seen across the hospitality sector in 2020 have been devastating," he added.

“Longer term, this may bring opportunities for ambitious operators by freeing up property and labour and reducing competition and costs.

“However right now, survival remains the name of the game. The Government support that followed this latest lockdown is a drop in the ocean for many operators who continue to accrue debt and burn through cash.

“Critically, unlike the first lockdown, operators now don’t have the benefit of a cash pile generated through the key Christmas trading period.

“Businesses, their funders, landlords and other stakeholders urgently need certainty and a roadmap to reopening. The rapid rollout of the vaccine offers hope but with restrictions unlikely to be lifted until Easter at the earliest, the coming months will likely see more sites lost for good.”

Trade body UKHospitality (UKH) has warned businesses in the sector must received further support if they are to survive and play a part in rebuilding the economy.

Dreadful blow

Chief executive Kate Nicholls said: “The loss of 6,000 premises is a dreadful blow to this country’s hospitality sector, but it is going to be the tip of the iceberg if we continue on our current course.

“The sector’s outlet numbers have contracted 5% and one in five businesses say they do not have enough cash to last beyond February. The entire sector continues to be hit hard, but restaurants have arguably been hit hardest of all. Not surprisingly, many of the worst off are independent businesses teetering on the verge of collapse due, in large part, to the issue of rent debt.

“This is a stark reminder of the importance of having an exit strategy and ongoing support for businesses. Sustaining businesses, keeping them alive and keeping jobs protected is vitally important and is going to be key to recovery once we emerge from this. If we have the right support in place now, it will make the job of recovery much more achievable once we are in a position to reopen again.

“The forthcoming Budget must be a one which delivers a bold, wide-ranging package of financial support to ensure as many businesses as possible are saved. The VAT cut and business rates holiday extensions must be top of the menu.”

Furthermore, British Beer & Pub Association (BBPA) boss Emma McClarkin predicted there was concern things will get worse for the trade before it improves.

She said: “These figures show what a devastating year 2020 was for pubs. Our sector is far from out the woods yet though and it continues to fight for its very survival through the pandemic in 2021. We fear things could actually get much worse before they get better for our pubs and brewers.

“Given this latest evidence showing how the Covid crisis and lockdown is ripping pubs away from their communities for good, it is more important than ever that the Government backs our local pubs and brewers.

“Pubs are the heart of our communities and have a vital role to play in the economic recovery. If they are to survive the current onslaught they face though they need backing from Government.

“This means grants delivered to them immediately before it’s too late. It also means reopening properly along with a stimulus package that helps pubs to thrive including extensions to the business rates holiday and VAT cut, as well as a beer duty cut.”

Related topics: Legislation

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