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Hospitality sector expands in fourth quarter, despite unprecedented challenges

Published:  20 January, 2022

Britain’s hospitality sector grew modestly in the last quarter of 2021, according to the latest CGA Market Recovery Monitor.

CGA's study recorded a 1.6% increase in the number of site openings between September and December 2021—the first quarter-on-quarter growth for more than five years, helping to reverse the number of closures during the pandemic. 

It also highlighted encouraging expansion in the number of independent outlets, rising by 1.8% in the last quarter of 2021.

Nevertheless, the industry will undoubtedly continue to grapple with immense challenges, including a chronic labour shortage and rising living costs. According to CGA, Britain has lost more than 8,000 pubs, bars, restaurants and other licensed venues since March 2020 – equivalent to a net loss of around 13 sites a day.

“Despite fourth-quarter growth, the future of more hospitality businesses is now under threat after a collapse in sales over Christmas and New Year, as concerns about the Omicron variant spread and fresh restrictions were introduced in Scotland and Wales, affecting over 16,000 sites – equivalent to 15% of the GB licensed market. The sector also faces a host of operational pressures, including rapidly rising food and energy costs, staff shortages and supply problems,” the report stated.

Karl Chessell, CGA’s business unit director for hospitality operators and food, EMEA, commented: “The increase in sites over the last three months of 2021 shows the remarkable resilience and entrepreneurialism of hospitality, and the enduring appeal of Britain’s pubs, bars and restaurants.”

He added: “But after disappointing December trading and challenges mounting, both new and established businesses are vulnerable as we begin 2022. These positive numbers show how hospitality is ready to kickstart Britain’s post-Covid-19 economy, but without urgent and sustained government support there is a real danger that recovery will stall.”

Yesterday (19 January), the government announced the end of Plan B Covid measures introduced to combat the Omicron variant, including compulsory mask-wearing on public transport and in shops, which will end on 26 January.