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Nearly a third of licensed premises shut prior to lockdown

Published:  10 November, 2020

Trading restrictions led to almost a third of Britain’s licensed premises shutting their doors in October ahead of England’s second lockdown on 5 November, according to the latest Market Recovery Monitor from CGA and AlixPartners.

This, the monitor said, was a sign that the sector may be “substantially reduced" after the end of England’s current four-week lockdown.

At the end of October, 69.9% of Britain’s total licensed premises were trading – a drop of more than 10 percentage points on sites open a month earlier (80.4%), and equivalent to nearly 12,000 sites closing their doors by the end of October, according to the report.

It remained to be seen how many of these closures were temporary or permanent, it stated, with the report showing that many of October’s closures were triggered by the government’s tier system, which forced pubs and bars in ‘Very High’ alert areas to shut unless they were serving substantial meals. 

Barely half (52.8%) of licensed premises in Tier 3 areas were open at the end of October – far below the numbers in ‘Medium’ (83.6%) and ‘High’ (82.8%) alert areas. 

Highlighting the “particularly heavy” impact of the tiered system and 10pm curfew on drinking-out venues such as high street pubs and bars, the report showed only 63.1% of drink-led sites were open at the end of October, compared to 79.9% of food-led operators and 81.3% of casual dining restaurants.

It was “very clear” from the report that every new restriction damaged businesses’ ability to trade, said Karl Chessell, business unit director for food and retail at CGA.

“Hospitality has been steadily reopening since the end of the first national lockdown, and nearly 20,000 sites opened their doors again over August and September – but October saw an abrupt end to the recovery.

“With England now in a second lockdown, we are unlikely to see Britain’s licensed premises return to the levels seen in the summer – let alone pre-pandemic – for a long time. Financially robust companies should be able to sustain themselves through the lockdown, and the extension of the government’s furloughing scheme will undoubtedly save some businesses. But much more support is going to be needed to prevent a wave of permanent closures over the winter,” he said.

The report also emphasises the stress of restrictions on small businesses, with fewer than two thirds (63.1%) of independent sites open at the end of October – far fewer than the 81.8% of managed venues that were in operation suggesting well-capitalised pub and restaurant groups will be better placed to survive the second lockdown than small firms.  

In mid-October, a survey coordinated by CGA found that members of three main trade groups expected 43% of closed outlets would not reopen, and that they would have to close another 6% by the end of the month.