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UK on-trade closures fall to lowest rate since 2018

Published:  09 March, 2020

Britain’s supply of restaurants, pubs, bars and other licensed premises fell by 1.8% in the 12 months to December 2019 - the lowest rate of year-on-year decline for nearly two years, according to the latest Growth Monitor from CGA and AlixPartners 

The report, released today, shows Britain had a total of 116,203 licensed premises at December 2019, which represents an average net closure rate of six sites a day over the last 12 months, but the pace of closures has now dropped to the lowest point since Market Growth Monitor data for March 2018. 

The survey also showed a 2.0% fall in Britain’s total pub and bar numbers, with food-led sites holding up better than community and drink-led locals, which have seen 4,297 net closures since December 2014. 

Meanwhile, there was a 1.6% drop in total restaurants—but group restaurants (managed sites of operators with more than one location) actually increased by 1.8% in the year to December—the second successive quarter of growth.

The growth was powered in particular by small to medium-sized group restaurant and openings in Britain’s big regional cities, with Birmingham, Bristol, Edinburgh, Glasgow, Liverpool and Manchester all in net growth year-on-year.

While the licensed sector continued to contract, the latest Market Growth Monitor also showed 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,” he said.

AlixPartners’ MD Graeme Smith said: “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 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.”