Almost 1,000 closures in second quarter of 2022

The most recent Market Recovery Monitor ​revealed there were just under 106,000 licensed venues at the end of June 2022 – virtually the same number as in June 2021 and March 2022.

However, the report forecast more net closures were possible in the second half of this year as a result of cost pressures on businesses and consumers.

The research detailed data from various parts of the industry and found managed operator sites rose by 1.8% in the past 12 months whereas independents saw a slight fall of 0.4%.

Furthermore, the casual dining, bar and bar-restaurant segments all grew while the number of restaurants dropped by 1.2% in the same period.

Under severe threat

The report also had a focus on London where parts of the capital have been impacted by the lack of office workers.

This included the City of London where the number of licensed premises has seen a net decline of 14%​ since the start of the pandemic in March 2020.

CGA director for hospitality operators and food EMEA Karl Chessell said: “These numbers are a welcome indicator in hospitality and proof operators have built back well from the turmoil of Covid.

“But this solid recovery is now under severe threat from a powerful combination of inflationary and other challenges and we are likely to see a lot more churn of openings and closures over the second half of 2022.

“Hospitality’s long-term outlook remains very positive but it is clear many businesses have a bumpy road ahead.”

The stability of overall numbers of hospitality venues against the background of the past two years is welcome, AlixPartners’ managing director Graeme Smith said.

Recovery mode

He added: “Clearly, after the challenges of the pandemic, the industry is still in recovery mode and adjusting to various challenges such as clear shifts in demand, brought about by some significant changes to the operating landscape.

“This is graphically illustrated with the impact evolved working patterns and the work-from-home culture has visibly had on bar and restaurant numbers in business districts such as the City of London.”

He predicted challenges in the short-term as a result of likely volatility that looks set to return.

“Many businesses are experiencing a significant step change in their cost base and with the Bank of England forecasting recession, consumer discretionary spending will likely come under further pressure too,” Smith said.

“For the sector, this inevitably means more closures and more churn but significant market share opportunities for the best businesses and brands.”