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Over 50,000 licensed premises still unviable as English lockdown ends

02 December 2020 by
Over 50,000 licensed premises still unviable as English lockdown ends

As many as 50,000 licensed premises could keep their doors closed even after the end of the national lockdown today, according to the latest Market Recovery Monitor from CGA and AlixPartners.

Research indicated that just 2,227 licensed premises—2% of the total—were located in Tier 1 areas of England. A total of 36,648 (39%) were in Tier 3, where hospitality venues must close except for takeaways and deliveries. The rest—55,502, or 59%—were in Tier 2.

CGA's research suggest that at least a third of operators in Tier 2 could be unable to trade while subject to these regulations. Combined with Tier 3 businesses, more than 50,000 licensed premises in England may not open their doors this week.

Some regions in Scotland remain subject to closures, meaning that only two in five (40.4%) of its sites were open. Numbers were only slightly higher in Wales (42.2%), which is likely to fall again when new trading limits are introduced later this week.

Karl Chessell, business unit director for food and retail at CGA, said: "After a steady recovery over the summer, these new figures illustrate the catastrophic impact of the government's restrictions on hospitality's ability to trade. The experiences of Scotland and Wales show that a release from lockdown is no guarantee that businesses can reopen.

"Despite the end of England's shutdown, the harsh tiered arrangements means tens of thousands of England's premises are simply unviable in their most important trading month of the year. The longer the system remains in place, the bleaker are the prospects for survival for many of these businesses."

AlixPartners managing director Graeme Smith said: "After what has undoubtedly been an ‘annus horribilis' for the hospitality sector, in normal times we would now be entering the most important four trading weeks of the year. However, the overwhelming majority of businesses in this sector are operating under crippling conditions and the government's latest offer of additional financial support for wet-led pubs appears unlikely to be sufficient to enable these businesses to survive.

"Figures from UKHospitality suggest the sector could see around £7.8b of revenue wiped out with the tier system in place, compared to last December. Any dreams that operators might have had of a post-lockdown bounce in England have quickly turned into the nightmare before Christmas as a result of these new restrictions. Much attention is being placed on what comes next given the messaging from the prime minister that restrictions will likely be in place well into the new year."

Photo: Shutterstock

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