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Bar and pub closures in Britain slow

The rate of closures of pubs and bars in Britain has slowed to its lowest level since early 2018, but drinks-led venues remain under “severe strain”. 

CGA said it is “still seeing unsustainable pubs close”

According to CGA and Alix Partner’s latest Market Growth Monitor report, Britain’s food-led pubs and bars were more fortunate in comparison to drinks-led venues, which have seen a 14.8% drop with the closure of 5,386 venues since December 2014.

Food-led pubs and bars witnessed a closure rate of 0.5% since December 2014, with the net closure of 87 venues.

A net total of 5,473 pubs and bars have closed in the last five years – equivalent to three a day – and the “pace of decline stepped up over the course of 2019”, according to the report.

In spite of this, the number of high street or ‘drinking circuit’ bars increased 1.3% due to a “steady stream of new openings in city centres, plus investment in the offer and drinks ranges of bars to renew their appeal to consumers”.

Britain had a total of 116,203 licensed premises in December 2019 compared to 118,374 in December 2018 – representing an average net closure rate of six sites a day over the past year.

The rate of closures for Britain’s pubs, bars and restaurants collectively witnessed a 1.8% decline in the 12 months to December 2019. The data showed that the pace of closures has dropped to its lowest point since the Market Growth Monitor report in March 2018.

The rate of closures for Britain’s restaurants dropped 1.6%, however group restaurants grew 1.8% last year. Growth was powered by small- to medium-sized chains and openings in Britain’s regional cities.

Dynamic market

“While the licensed sector continues to contract, our latest Market Growth Monitor also shows reasons to be optimistic about prospects for 2020,” said Karl Chessell, business unit director for food and retail at CGA.

“We are still seeing unsustainable pubs close, but collectively the rate of net number of pub, bar and restaurants closing is slowing. Last year was not easy for some big restaurant brands, but smaller and medium-sized brands are bringing new concepts to the market and successfully scaling up. All our research shows that consumers are still eager to go out to eat and drink, and they’ve never had it better for choice.”

Alix Partners’ managing director Graeme Smith added: “Overall, the eating and drinking out market remains dynamic and attractive to investors, with this very much in evidence across last year where pubs and experiential businesses took up the slack in investment activity from the more subdued restaurant sector.

“Reduced political uncertainty, more positive recent trading results and encouraging returns when investing in sites, provide a platform for increased M&A [mergers and acquisitions] and investment activity in 2020 across both wet-led and food-led concepts. However, investors will be looking carefully at what the impact on trading will be from the recent coronavirus outbreak.”

The number of pubs, bars and restaurants in seaside towns saw a collective decline of 5.8% in the 12 months to December 2019. Blackpool reported the highest number of premises shut at 10.8%.

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