Britain loses 4.3% of hospitality venues

Britain has lost 4,953 hospitality venues in the 12 months to March 2023, equivalent to 4.3% of the licensed sector, according to new research.

CGA by Nielsen IQ’s quarterly hospitality market monitor, published 1 May, found that 756 licensed premises closed during the first three months of 2023 (first quarter), which is believed to be an impact of high inflation and the cost-of-living crisis.

This represents a drop of 0.7% from the total at the end of 2022, equivalent to 8.4 closures a day.

The drop of 4,953 venues since 2022 is equivalent to an average of 12.6 closures a day.

There are 101,315 licenses venues in Britain as of March 2023.

Graeme Smith, managing director, AlixPartners, said: “While the number of pubs, restaurants and other licensed venues continues to contract in UK hospitality, there is some positivity in this latest analysis of the market, given that the overall cadence, or rate of decline, has slowed significantly.

“Underpinning this is the fact that the rate of closures in all major cities is reducing, as Covid-19 concerns subside, and workers and tourists steadily return to urban centres – even to a degree, on Mondays.”

Bars were found to have fared the best out of all licensed venues: in March 2022, 4,497 bars were recorded to be in operation, and this sits at 4,457 in March 2023 – a dip of 0.9%.

In the same period, nightclubs experienced the worst decline of all venues, seeing a 14.9% decline.

Britain now has 30.6% fewer nightclubs than it did three years ago, CGA said.

Since March 2022, the country has also seen a decline in restaurants (down by 7.8%), sports and social clubs (down by 4.8%), and casual-dining restaurants (down by 4.2%).

The report found that Britain has a total of 13,793 fewer bars, pubs and restaurants and other licensed premises than it did in March 2020, representing a 12% contraction when looking at the numbers in March 2023.

Closures across different cities

When looking at regions across the UK, the rate of closures largely differs.

Bristol experienced a 1.5% decrease in licensed premises between March 2020 to March 2023, yet a 1.1% boost since December 2022.

Aberdeen was revealed to be the city that suffered the most closures of hospitality venues, seeing a 18.9% fall since March 2020 – but a 0.5% jump since December 2022.

Since March 2020, other cities that have seen a significant loss of venues are Birmingham (down by 17.1%), London (down by 15.6%), York (down by 14.9%) and Glasgow (down by 14.7%).

Smith continued: “This stabilising picture extends to London – the largest leisure market, which was most affected by Covid-19 – and it’s clear that many of Britain’s city centres are returning to something comparable to their pre-Covid vibrancy.”

Venues could fall below 100,000 by the end of 2023

Among drinks-led venues, since March 2022, independent sites witnessed a 4.2% decline, and leased sites dropped by 5.6% decline. Managed venues fared better with a 4.1% increase.

“Tellingly, this latest study underlines the growing divide between larger and smaller operators, reflecting the varied ability to withstand the continued headwinds the sector faces,” Smith said.

“The closure rate of independent businesses – the lifeblood and entrepreneurial driving force of the sector – continues to vastly outstrip the better-funded corporates and the branded operators. It highlights the need for government support to be extended, especially on energy costs, if small (often family-owned) businesses are to survive.”

By the end of the year, the total number of licensed venues is likely to fall below 100,000 for the first time in many decades, said Smith.

“It reflects approximately 13,000 closures since March 2020, and the many thousands of pubs that have shut in the decades prior,” he continued.

“This is a trend that speaks to the relative decline of high-frequency drinking occasions, which have in part made way for the explosion in (less frequent, higher spend) dining-led visits, and the rise, in recent times, of (less frequent, higher spend) competitive socialising occasions. ”

Venues that have had to close this year due to rising costs include Birmingham cocktail den The Pineapple Club, and Ireland’s first alcohol-free bar, The Virgin Mary.