Research from the latest Market Recovery Monitor from CGA and AlixPartners found Britain had 105,908 licensed venues as of 30 March 2022 however, this was 0.9% short of the number of venues recorded for the last quarter of 2021.
When split into segments of the on-trade, the bar sector saw a rise in numbers compared to March 2021 of 2.3% (up from 4,397 to 4,497). The large venue segment also saw a rise in numbers but of 1.5% against March last year.
Nightclubs saw the biggest drop in number of sites, falling 9.8% from 1,127 in March 2021 to 1,017 in March this year.
Pubs were segmented into three different areas – community, food and high street with the community suffering the biggest drop of 1.6%. High street pubs also fell (1%) as did food pubs (0.2%).
The report broke down the numbers into regions too, highlighting the 10 British city centres with the most licensed venues as of March 2022. Leeds saw a 7% increase and Birmingham suffered a 3% decrease.
Across the three segments of food-led venues, drink-led venues and accommodation-led venues, it was the latter that has seen the biggest change with a fall of 1.1%.
This was followed by wet-led sites (0.7%) with food-led seeing the smallest change (0.4%) when comparing the numbers from March 2021 to March 2022.
CGA director for hospitality operators and food EMEA Karl Chessell 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 support issues are making conditions extremely difficult and we can expect to see a steady flow of closures and new openings as the year goes on.”
The report also stated the churn of hospitality venues is at its highest point for some time with the rate of closures high but so is the pace of new openings.
The churn rate, according to research for the Market Recovery Monitor, is currently at 0.6 meaning for every 10 venues closing, six have opened in 2021.
AlixPartners managing director Graeme Smith said: “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, we will be the careful consideration, testing and implementation of strategic pricing options.”