Hospitality sector sees first outlet growth in two years
Britain’s hospitality sector has recorded its first quarterly growth in outlets in two years, according to the latest Hospitality Market Monitor from CGA by NIQ and AlixPartners.
The report reveals a 0.5% rise in the number of licensed premises between March and June 2024, translating to 462 net new openings, or five per day. This marks the first increase since mid-2022 and only the third since the pandemic hit the UK in early 2020.
The growth was consistent across various sectors, including the independent segment, which also saw a 0.5% increase, reversing several years of closures driven by cost pressures and the pandemic.
This positive trend aligns with other encouraging signs from 2024, such as strong sales growth recorded by CGA by NIQ’s Trackers, as well as a reduction in inflation and household bills.
However, despite the quarter-on-quarter improvement, long-term comparisons remain weak, with outlet numbers down 1.0% or 969 from June 2023. The total number of sites in Britain is still 13.8% lower than the pre-pandemic figure of March 2020.
The casual dining sector has shown particularly positive developments. Following a sharp decline due to Covid-19 and high inflation, the number of casual dining sites dropped by 24.1% from 6,696 in March 2020 to 5,082 in June 2023. However, the sector has seen a 1.7% increase over the past 12 months, with three net new sites opening each week in the first half of 2024.
Karl Chessell, CGA by NIQ’s director of hospitality operators and food, EMEA, said: “These numbers are a welcome sign of the confidence of business leaders and investors in hospitality. While it’s too early to be sure that hospitality’s downward trend in outlets has bottomed out, alongside solid sales growth over the first half of 2024 these figures indicate the brightest outlook for the sector for some time.”
He cautioned, however, that many businesses remain fragile due to ongoing cost pressures and constrained consumer spending, meaning the sector may never return to its pre-pandemic size.
Graeme Smith, MD at AlixPartners, highlighted the positive impact of easing labour shortages, food and drink inflation, and energy prices on the sector.
“It’s especially encouraging to see such significant growth in the themed bar segment – a segment that includes both competitive socialising venues and bars with a particular theme – with a growth rate of 28.9% over the last 12 months. This has been driven by the continued popularity of experiential leisure and the demand from consumers to elevate their experiences when socialising out of home,” Smith concluded.
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