Nearly 10,000 hospitality premises close in Britain’s Lockdown year
Covid-19 and lockdowns contributed to a net decline of 5,975 sites in 2020 and a 175% increase on the 2,171 drop in sites in 2019.
The Market Recovery Monitor measures the scale of the damage wrought by the pandemic on hospitality businesses and it forecasts many more closures in 2021.
CGA works with food and beverage suppliers, consumer brand owners, wholesalers, government entities and pub, bar and restaurant retailers to protect and shape the future of the on-premise experience.
The latest edition of CGA and AlixPartners’ Market Recovery Monitor sets out the lasting damage of the pandemic, with casual dining, independents and city centre operators among those hardest hit.
In all, the Covid-19 pandemic has contributed to the permanent closure of 9,930 UK sites although the year saw 3,955 openings, meaning that for every new opening in the UK market last year there were 2.5 closures – close to double the ratio of 1.3 in 2019.
The report shows that Covid-19 and lockdowns contributed to a net decline of 5,975 sites in 2020 and a 175% increase on the 2,171 drop in sites in 2019.
Casual dining, made up of primarily chain-operated sites, saw 878 closures throughout the year, with 230 new openings. In particular it highlights the significant impact on the casual dining sector, where total site numbers dropped by 9.7% in 2020 – 3.8 permanent closures for every new opening.
The restaurant sector, made up of largely independent-run businesses, was also hit hard. Many more closures are expected across the sector this year as 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%.
“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,” said Karl Chessell, CGA’s Business Unit Director for Hospitality Operators and Food, EMEA, “After such a bleak Christmas it’s 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.”
AlixPartners’ Managing Director Graeme Smith added, “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.
