The total number of licensed pubs, bars, restaurant, clubs and hotels in the UK has risen quarter on quarter for the first time in two years in a new sign of a revival for the embattled hospitality sector.
An industry survey shows there 99,207 licensed premises in June, up 462, or 0.5%, since March, according to the latest Hospitality Market Monitor from CGA compiled by NIQ and AlixPartners.
Although only a modest increase the rise represents the first bounce in the sector since the start of the cost of living crisis and the great surge in costs that sent so many operators to the wall. It is also only the third quarterly rise since the start of the pandemic in early 2020.
The hospitality industry has been hit by waves of setbacks since the first Covid lockdown four and a half years ago which resulted in the closure of thousand of premises. That has been followed by the rise of hybrid working which has kept the number of diners and drinkers in city centres, particularly London, below pre-covid levels, as well as train strikes, bouts of bad weather and a crippling rise in costs, particularly energy, labour and food bills.
However, some of the pressures have started to ease over the past year as inflation has steadily fallen and the cost of living crisis eased.
However, despite the revival the sector remains far smaller than before the pandemic with total sites total sites still 13.8% below the pre-COVID figure of March 2020.
The casual dining sector was particularly badly hit over the last four years with site numbers down by almost a quarter and a closure rate of just over one per day.
However, the figure has risen by 1.7% in the last 12 months, with an average of three net new sites a week in the first six months of 2024.
Karl Chessell, CGA by NIQ’s director - hospitality operators and food, EMEA, said: “These numbers are a welcome sign of the confidence of business leaders and investors in hospitality.
“While it’s too early to be sure that hospitality’s downward trend in outlets has bottomed out, alongside solid sales growth over the first half of 2024 these figures indicate the brightest outlook for the sector for some time. Cost pressures mean thousands of businesses remain fragile and millions of consumers’ discretionary spending continues to be tight, and hospitality may never fully return to its pre-COVID size in outlet terms—but it’s clear that it is now back on a much surer path.”
One sub-sector that has performed particularly strongly is “themed bars” which includes competitive socialising venues. They are up by 29% over the past year. However, nightclubs are down by 10%.
