More hospitality closures in 2022 than Covid-hit 2021 reports CGA

By James Bayley

Published: 20 January, 2023

In a new report published by CGA, inflation in energy bills and other costs led to a net decline of 1,611 licensed premises in the fourth quarter of 2022.

It represents a 1.6% contraction of the market in just three months – equivalent to nearly 18 net closures every day. Across the whole of 2022, hospitality recorded a drop of 4,809 premises, or 4.5% of the total at the end of 2021, with more than three-quarters of the closures occurring in the second half of the year.

This means hospitality has suffered a higher tally of closures in 2022 than in 2021 when Covid restrictions severely curtailed trading. The sector now has 13,037 fewer sites than at the start of the pandemic in March 2020 - a decline of more than 10% in under three years.

READ MORE: Chris Losh: Hospitality sector reels from strikes

Many of 2022’s closures were the result of spiralling costs in energy, food and other key areas, which have hit profit margins and made real-terms growth difficult. Fragile consumer confidence, rail strikes and labour shortages are all adding to the headwinds facing hospitality operators in 2023.

According to CGA, nearly nine in 10 fourth-quarter closures occurred in the independent sector, as small businesses that were weakened by Covid were forced to close their doors.

Karl Chessell, CGA’s director for hospitality operators and food, EMEA, said: “While Covid took a heavy toll on hospitality, these figures suggest the energy crisis is having an even more damaging impact. Given all the pressures, a drop of more than 1,600 venues in three months is quite shocking and every closure represents a sad loss of jobs and disappointment for communities and operators.

“Although consumers remain eager to visit pubs, bars and restaurants, thousands of vulnerable businesses are at risk after three years of turmoil from Covid and inflation. Urgent and targeted government support is needed to sustain them through what promises to be another very difficult year.”

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