Hospitality closures fall in third quarter
The Hospitality Market Monitor from CGA by NIQ and AlixPartners has recorded a fall in licensed premises of 0.3% – the equivalent of three net closures a day, in the third quarter.
Although still in decline, the rate of closures for the third quarter is in stark contrast to the overall picture in the 12 months to 30 September, which saw more than 10 net closures every day, culminating in 3,766 closures.
As a result, by the end of September, the number of licensed premises in Britain fell below 100,000 for the first time in the monitor’s history (99,916 sites).
However, thanks to a particularly robust third quarter, the pace of venue failures has slowed as the year has gone on. In the three months to 30 September 2023, multi-site managed groups achieved 0.5% growth, in contrast to a 0.6% drop in the number of independently-run venues. Many of Britain’s biggest city centres also saw a net quarter-on-quarter increase in sites, including London, Manchester and Edinburgh.
Karl Chessell, CGA by NIQ’s director - hospitality operators and food, EMEA, said: “It is pleasing to see a slowdown in closures over the third quarter of 2023, though whether it is the beginning of a sustained positive trend or a lull remains to be seen.
“High inflation and interest rates are keeping a lid on consumer confidence, but the healthy growth in venues from multi-site managed groups is a positive sign of confidence from business leaders and investors. Despite the contraction in size in recent years, the long-term outlook for hospitality remains very good.”
Graeme Smith, AlixPartners’ managing director, added: “While it is never nice to see the number of licensed premises in the UK continue to fall, what the figures don’t show is that, whilst the sector has contracted overall, this masks an evolution of the market as it has become more varied and more innovative.
“In addition, the standard of offer across the full spectrum of the hospitality industry has never been higher. Recent figures show that the contraction in site closures has slowed, this comes after a period of significant estate consolidation. It also marks a period when many operators have tentatively returned to the expansion trail, coupled with the continued entry of new concepts and international brands into the sector. If consumers continue to spend on hospitality and experiences in the face of more challenging economic conditions, we could see site numbers begin to expand again in 2024.”
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