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Two restaurants closing a week, but UK dining scene shows reverse North-South divide

Published:  28 June, 2018

The number of licenced restaurant in the UK has fallen by -1.3% in the twelve months to March 2018, with the total number dining outlets also falling by 0.4%, according to the recent Market Growth Monitor report from CGA.

The figure equates to two sites closing their doors each week, up from a 0.3% drop recorded in the last quarterly CGA report.

This represents an acceleration of a trend that has seen an overall -2.5% decrease in the number of licenced premises over the past five years, to a total in March 2018 of 120,662 operating outlets, and is also the first time that an overall fall in numbers has been recorded.

Data from CGA reveals that overall restaurant numbers had risen by 15.6% since March 2013, but a number of recent high profile closures and axing of branches has contributed to the current reversal of fortune.

Carluccio’s, Jamie’s Italian, Byron, The Gaucho group’s Cau estate and Cote are among several high profile chains that have in the past twelve months either shed outlets or announced that cuts will be made in a market that many operators agree is saturated – at least in the casual dining sector.

CGA’s Market Growth Monitor report, which draws on data from the pub, bar and restaurant sectors, identifies “flat sales, rising food costs” as contributing factors, predicting that “a further retrenchment” is likely through the second half of 2018.

However, in a somewhat contrasting picture, the report also decsribed a confident mood among leading operators, with many casual dining brands continuing to open sites around Britain.

Another interesting finding is that in the large northern cities, such as Manchester, Liverpool and Leeds, the number of food-led licenced outlets continues to rise, with those cities experiencing growth in the number of restaurants of 33.6%, 31.9% and 37.9% respectively over the past five years.

CGA vice president Peter Martin suggested that brands with strong differentiation and customer focus would continue to flourish in the current market.

However, he added: “With over-supply becoming apparent, input costs still rising and Brexit causing uncertainty, we are likely to see a further restraint in new openings this year.”

Another positive side of the closure of sites by larger groups and chains is that smaller operators intent on growing have been able to cherry pick sites as they come on to market.