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Rate of hospitality closures slows

Published:  08 May, 2024

The latest data from CGA shows that closures in Britain’s hospitality sector slowed from eight sites a day in 2023 to four a day in the first quarter of 2024.

There’s no escaping the fact that hospitality has been dealt a rough hand in recent years. The current total of 98,745 hospitality venues (pubs, bars, restaurants, hotels and other forms of licensed premises) means the market is down by 2.5% year-on-year. This equates to the closure of one in 40 venues over the past 12 months. However, the latest three-month snapshot provides cautious confidence.

There are signs that a slight easing of cost pressures may be starting to put the brakes on business closures. A modest revival of casual dining and independent restaurants is also happening alongside, offering up additional reasons for optimism.

“Four hospitality venues closing a day is still four too many,” Kate Nicholls, chief executive of UKHospitality, said.

“These closures rob communities of all the benefits hospitality serves up for Britain – the crucial job opportunities, local economic growth and hubs for communities. However, this data gives some signs to suggest the sector is beginning to recover. A slight growth in both casual dining and independent restaurants indicates a potential growth in an appetite for investment in the sector.”

The data, from CGA’s latest Hospitality Market Monitor, shows positive trends in the eating out of home market. Food-led site numbers increased by 0.1% in the first quarter of 2024 (January to March 2024), driven by a modest growth for casual dining and independent restaurants. These two segments recorded a combined net decline of 21% of sites between the start of the pandemic in March 2020 and December 2023, but appear to have stabilised and achieved 0.5% growth in the first quarter of 2024.

However, drink-led businesses struggled to maintain momentum, falling by 0.7%.

The independent restaurant sector also remains vulnerable. Despite improving trends in the first quarter of 2024, the channel experienced a 22% decline between March 2020 and December 2023.

Karl Chessell, a director at CGA said: “After a very challenging few years, these numbers give grounds for tentative optimism that hospitality closures will slow as 2024 goes on. While thousands of businesses remain fragile, a downward trend in inflation should hopefully raise the confidence of operators, consumers and investors alike, and protect more venues from closing the doors. It is particularly encouraging to see a marginal return to new openings for both casual dining and independent restaurants, though sustained growth is likely to be some way off.”