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Branded hospitality closures stabilise following steep decline

Published:  05 July, 2021

Newly released data has revealed a slowdown in outlet closures for some of the sector’s biggest companies, with the numbers levelling off versus the “steep declines” of 2018 and 2019.

According to the latest data from the Lumina Intelligence, a net loss of just 29 sites is expected across the UK’s branded pub, bar restaurant sector this year – a notable slowdown from the 611 lost in 2019.

The slowdown appears to be down in part to a major refurbishment effort at groups such as Greene King, Mitchells & Butlers and Marston’s which have transformed older branded pub restaurant sites into more modern and unique propositions.

Lumina Intelligence’s data shows that the total number of managed sites declined by 1.8% last year to 3,782 as pandemic-related restrictions and loss of earnings had a permanent impact.

However, this marks a much softer decline compared to the significant drop in 2019 when fallout reached 5.8%, leaving the total number of branded outlets in the UK at 3,852 sites. The forecasted loss to the end of 2021 is just -0.8%, bringing the total number of UK branded sites to a predicted 3,753.

“Over the last 18 months, pub and bar restaurants have had to transform the way they operate in order to remain open and survive,” Katherine Prowse, senior insight manager at Lumina Intelligence, said.

“This inevitably resulted in casualties; however, with restrictions easing, we expect outlet decline to continue to stabilise versus the steep declines seen in 2018-19. This slight decline will be driven by pub groups continuing to dispose of and transfer sites into unbranded estates.”

It is worth nothing that pubs have been much more insulated to site closures in comparison to restaurants in the past year, which may account for some of the postitive results. Pubs have different property structures, with many tied to long-term leases and many pub buildings owned entirely by pub companies.

Data is taken from The Lumina Intelligence Operator Data Index, a tool that tracks the performance of hospitality operators through a mixture of turnover and outlet numbers, and in this instance focuses solely on the branded part of the market. 

As well as slowed negative growth, this part of the sector is also expected to be buoyed by expansions at several major operators.

Despite challenges caused by the pandemic over the past 18 months, Loungers for example has voiced ambitions to continue adding 25 sites a year across its Lounges and Cosy Club brands.

Additionally, the top 10 branded pub & bar restaurants by outlets are expected to see a decline of only 10 sites between them in 2021, while many are expected to grow. Chef & Brewer (+3.1%) and The Lounges (+8.6%) are the two brands forecast to experience the fastest growth in 2021.