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Nearly 6,000 licensed premises lost in Britain’s year of lockdowns Published Date: 22/01/2021

Britain lost around 6,000 licensed premises last year, the latest Market Recovery Monitor from CGA and AlixPartners reveals—nearly triple the number in 2019.

It shows that the COVID-19 pandemic and wave of lockdowns contributed to a net decline of 5,975 sites in 2020. This represents a 5.1% contraction in the market since the end of 2019, and a 175% increase on the 2,171 drop in sites that year.

The turmoil of 2020 led to the permanent closure of 9,930 sites, with only 3,955 opening for the first time. It means that for every new opening in the market last year there were 2.5 closures—close to double the ratio of 1.3 in 2019.

The Market Recovery Monitor measures the scale of the damage wrought by the pandemic on hospitality businesses, and forecasts many more closures in 2021. It highlights in particular the significant impact on the casual dining sector, where total site numbers dropped by 9.7% in 2020, and 3.8 permanent closures for every new opening. The community, food and high street pub segments all saw numbers fall between 3.9% and 5.1%. The sports and social club sector, which has suffered from bans on events and socialising, recorded a decline of 6.2%.

Our report takes stock of the huge damage wreaked by the pandemic on the licensed sector in 2020,”

said Karl Chessell, CGA’s business unit director for hospitality operators and food, EMEA.

“With stop-start trading for much of 2020 and a widespread shutdown during what should have been a bumper Christmas, nearly 10,000 licensed venues have not been able to make it through, and it is sadly inevitable that thousands more casualties will follow.”

He added:

“After such a bleak Christmas it is difficult to be optimistic about the market. But consumers are desperate to get back to eating and drinking out, and we can be confident that footfall and sales will return when the sector can finally reopen. In the meantime, the case for government support over the next few months is urgent and compelling. There are better days to come, but the sector will be in survival mode for some time yet.”

The latest edition of the Market Recovery Monitor contains in-depth analysis of closures in 2020 by market segment, location and tenure. Among other insights it reveals the severe impact of the pandemic on independent businesses, and the toll taken on city and town centre operators as footfall plummeted.

AlixPartners managing director Graeme Smith said:

“The wave of closures seen across the hospitality sector in 2020 have been devastating. Longer term this may bring opportunities for ambitious operators, by freeing up property and labour and reducing competition and costs. However, right now survival remains the name of the game. The Government support that followed this latest lockdown is a drop in the ocean for many operators, who continue to accrue debt and burn through cash. Critically, unlike the first lockdown, operators now don’t have the benefit of a cash pile generated through the key Christmas trading period.

Businesses, their funders, landlords and other stakeholders urgently need certainty and a roadmap to reopening. The rapid rollout of the vaccine offers hope, but with restrictions unlikely to be lifted until Easter at the earliest, the coming months will likely see more sites lost for good.”

The Market Recovery Monitor is based on CGA’s exclusive Outlet Index, a constantly updated database of the country’s premises. It will be published monthly in 2021 to help track the sector’s progress.

Source: cga.co.uk