Third of Britain’s on-trade venues shut in October

Nearly a third of Britain’s bars, pubs and restaurants permanently or temporarily closed last month as a result of coronavirus restrictions, according to new research.

Drinks-led venues in Britain were hit hardest by coronavirus restrictions

The latest Market Recovery Monitor report from CGA and Alix Partners found that 69.9% of Britain’s licensed venues were operating by the end of October 2020. This is compared to 80.4% in September.

The report said the findings equate to nearly 12,000 sites closing their doors, either permanently or temporarily, by the end of October.

Last week, bars in England were forced to shut until 2 December under new coronavirus measures. On-trade venues in Wales reopened this week following a two-week lockdown but must stop serving alcohol at 10pm.

“Hospitality has been steadily reopening since the end of the first national lockdown, and nearly 20,000 sites opened their doors again over August and September – but October saw an abrupt end to the recovery,” said Karl Chessell, business unit director for food and retail at CGA.

“It’s very clear from this report that every new restriction damages businesses’ ability to trade. With England now entering a second lockdown, we are unlikely to see Britain’s licensed premises return to the levels seen in the summer – let alone pre-pandemic – for a long time.”

The report said the closures were caused by the government’s three-tier system of restrictions in England, which saw on-trade venues located in the highest tier shut unless they were serving food. Wales and Scotland also announced similar measures in recent months.

Just over half (52.8%) of venues in tier three (‘Very High’) were open by the end of October, a stark contrast when compared to 83.6% of venues in the ‘Medium’ tier and 82.8% in the ‘High’ level. In tier three areas of England, just 31.6% of bars and 51.4% of high street pubs were trading at the end of October.

The report found that drinks-led venues were hit hardest by restrictions, with 63.1% of these sites open by the end of October. In comparison, there were 79.9% of food-led sites open and 81.3% of casual dining restaurants open.

In addition, 63.1% of independent licensed venues were open at the end of October, compared to 81.8% of chain venues that were in operation.

Last week, the UK government extended the furlough scheme until March 2021 and recently reversed its decision to prohibit on-trade venues across England from offering takeaway alcohol under new lockdown rules.

Alix Partners managing director Graeme Smith said: “Undoubtedly, more financially resilient managed pub and restaurant groups are in a better place to ride out the storm, however, while the recent extension of furlough does offer some security, it also raises the spectre of further lockdowns in the months ahead; with an extended stop/start period potentially worse for operators in cash terms.

“Now the government has provided welcome assistance with wage costs, companies will be looking to Westminster for further support to help solve the sector’s rising debt mountain, especially when it comes to rent and the stalemate many are experiencing in negotiations with landlords.”

Chessell added that more support is needed from the government “to prevent a wave of permanent closures over winter”.