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Industry had contracted before the Covid-19 lockdown

21 May 2020 by
closed sign restaurant

Restaurant numbers had already fallen by 2.4% year-on-year at the end of March, the CGA AlixPartners Market Recovery Monitor has shown.

The number of licensed premises in the UK stood at 115,108 at the end of March, with independents making up approximately two-thirds of sites.

The Covid-19 pandemic is expected to initiate a sharp increase in the rate of decline with only a third (36%) of business leaders in the pub, bar and restaurant industry believing they will eventually reopen all their sites for trading.

According to CGA's latest Business Confidence survey, another third (32%) of business leaders are already anticipating the need to permanently close sites, with the remaining third yet to decide.

Graeme Smith, managing director at AlixPartners, said: "Many operators have got their tape measures out to assess the impact of social distancing restrictions on operations and capacity. Even with well-configured space, cover counts will be meaningfully reduced and may prompt further questions on whether it is sensible to reopen, or not, from a profit perspective.

"Location considerations will be another factor – it's easier to foresee rural and suburban venues opening faster than those located in large city centres given there will be a significant period before offices reopen and footfall numbers return to prior levels, particularly where mass-transit is key for commuters."

The analysis has suggested that casual dining might be more vulnerable than other operations. The sub-sector, including independents as well as the branded chains, declined 3.1% overall in the year to March, and with its dependence on retail, business and urban locations may need longer to recover than other parts of the market.

Kate Nicholls, chief executive of UKHospitality, commented: "These new figures are a useful starting point as to the state of the hospitality sector as the country moved into lockdown, and paint a picture of a market that, in parts, was already under pressure. Our own data reveals that the sector experienced a sales decline of 21.3% in the first quarter of 2020. Hospitality was hit first, has been hit hardest and will take longer than most to recover.

"Our new #FAIR4Hospitality campaign calls on governments across Britain to invest in a fair and timely return for hospitality this summer, for the benefit of local communities, peoples' jobs, national wellbeing and the economy. How the sector restarts and at what pace will vary dependent on type of business and government guidance, so these figures will be useful on an ongoing basis for all those invested and passionate about our sector.

"Hospitality is ready, with the right support, to play a leading role in the recovery, can help rebuild shattered consumer confidence and bring the nation back together safely over the coming months."

Picture: Shutterstock

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