Nine licenced premises per day shut in 2023's fourth quarter
The number of licensed premises across Britain dropped by 0.8% in the fourth quarter of 2023, according to the latest Hospitality Market Monitor from CGA by NIQ and AlixPartners.
The figure is equivalent to 803 net closures in three months, or nearly nine per day. It represents an acceleration of closures from the third quarter of last year, when numbers fell by only 0.3% - but it is more positive than the average of 24 closures a day that the Monitor recorded in mid-2022, when post-Covid business failures were at a peak.
Britain had 99,113 licensed premises at December 2023 - nearly 3,000 fewer than 12 months earlier, and 16,000 fewer than at March 2020, at the pandemic's UK outbreak, the report analyses. The independent sector has been hit particularly hard, with numbers falling by a sixth (16.6%) since early 2020.
The Monitor's latest edition has a special focus on the pub sector, where the number of premises has plunged by 43.6% over the last 20 years. It indicates that food-led pubs have been relatively resilient, with a 7.6% drop since March 2020, while community and high street pubs have dipped by 11.8% and 11.2% respectively. This reflects the long-term shift in the way people use pubs, and a change in focus from drinking out to eating out. Managed pub groups have achieved growth of 4.2% in that time, while independents (down 14.1%) and leased operators (down 14.4%) have found it harder to recover from Covid lockdowns.
Karl Chessell, CGA by NIQ's business unit director - hospitality operators and food, EMEA, said: "Given all the pressures on hospitality in recent months, it is no surprise to see more contraction in site numbers in late 2023. More closures can be expected in the coming months as inflation and labour issues continue to put strain on businesses, and independent operators are particularly vulnerable.
"However, CGA's data points to solid trading for managed pubs, bars and restaurants, and likely drops in inflation and interest rates will hopefully ease costs and loosen people's spending as 2024 goes on. Whether or not this leads to a slowing of closures and a trigger for new openings remains to be seen."
Nevertheless, Graeme Smith, AlixPartners' managing director, forecasted: "As we head into 2024 the outlook looks brighter. With inflation pressures easing and financing costs looking like they have peaked, many operators are looking forward to a more profitable year ahead."
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