Britain’s number of licensed premises has stayed level in the last year despite challenges such as Brexit and food cost inflation.
According to the December edition of the Market Growth Monitor from CGA and AlixPartners, Britain had 122,783 licensed premises in September 2017, an increase of 42 sites from September 2016 (122,741).
The number has been sustained by a steady decline in Britain’s pubs (a 2.3% decline in drink-led sites) and a steady increase in its restaurants (1.6% rise), specifically driven by casual dining groups.
In London, there has been a split in the market with licensed premises in the centre of the capital still increasing but operators further out reducing slightly. Restaurant numbers in inner London have increased by 3.1% in the year to September, but fallen by 0.3% in outer London.
New openings in London have been driven by small and medium-sized managed restaurant groups, which have increased their number of sites by 75% and 94% respectively over five years. Large groups operate 53% of all managed restaurants in outer London—but just 30% in inner London.
The monitor revealed that uncertainty over Brexit – especially around the issue of migrant labour – has dented the sector with just 30% of leaders feeling optimistic about the next 12 months.
CGA vice president Peter Martin said: “There is no escaping the fact that 2017 has been a very tough year for many pub and restaurant operators, with steep rises in food costs and Brexit just two of the big challenges. But these Market Growth Monitor figures are proof of the steely resilience of the sector and consumers’ continued appetite for eating and drinking out. Conditions aren’t about to get any easier next year, but there are reasons for cautious optimism as we draw towards the end of 2017.”
AlixPartners managing director Graeme Smith said: “At a site expansion level, the prevalent macro trends continue: a contracting pub market and the measured growth of food-led outlets. Although the market’s long-term fundamentals—including consumer demand—remain robust, the sector’s immediate trading performance is what positive operators are politely calling ‘soft’. Many parts of the market are currently under pressure, and like-for-like sales growth has slowed in a competitive environment. When combined with the backdrop of sustained cost inflation, profit growth is becoming harder to come by.”
The AlixPartners CGA Market Growth Monitor is produced quarterly and is drawn from CGA’s Outlet Index, a comprehensive and continually updated database of all licensed premises in Great Britain.
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