Nine in 10 (88%) operators say pubs, bars and restaurants will be unviable or loss-making in Tier 2 regions of England, where well over half (59%) of licensed premises are located.
This information comes from the latest Business Confidence Survey from CGA and Fourth, which reveals the toll that the pandemic has taken on the hospitality sector, with fewer than 18% of business leaders optimistic about market prospects over the next 12 months.
The figure is 42 percentage points down on the pre-pandemic level of 60% in the February edition of the survey. Extended restrictions on trading and socialising over the autumn have led more than a quarter (27%) of multi-site business leaders to predict their groups will be unviable within the first six months of 2021 if current levels of support continue. Single-site businesses are at even greater risk of failure, the survey shows.
However, twice as many leaders (35%) say they are optimistic about their own business’ prospects over the next year—a substantial increase from the last edition of the Business Confidence Survey. There are also signs of cautious ambition, with more than two in five (44%) leaders intending to open new sites in 2021.
CGA’s research, supplemented by a poll of members of UKHospitality, the British Beer and Pub Association and the British Institute of Innkeeping, shows the particularly damaging impact of England’s tiered system of restrictions.
Nine in 10 (88%) leaders say pubs, bars and restaurants will be unviable or loss-making in Tier 2 regions of England, where well over half (59%) of licensed premises are located.
CGA’s research & insight director Charlie Mitchell said: “As we near the end of hospitality’s toughest year in memory, the bleak picture of the sector will come as little surprise. Suffocating restrictions across Britain will devastate trading in what should be businesses’ busiest time of the year. Leaders’ optimism is at least rising from the rock bottom level of our last survey, and news of a vaccine is a reason for cautious hope of recovery in 2021. However, this week’s Tier 2 restrictions in England and strict new limits in Wales could be fatal for smaller business in particular, making the case for more relaxed trading conditions and better government support even more urgent.”
What Tier 2 rules mean for hospitality
Under the new system for Tier 2 in England, the controversial 10pm curfew has been scrapped, and hospitality venues are now allowed to stay open until 11pm, with last orders at 10pm. However, only those outlets that serve ‘substantial meals’ can operate, meaning that pubs and bars that don’t offer food have to close.
Previous Tier 2 rules apply regarding mixing of households, with no social mixing allowed indoors, save for households or support bubbles. Meanwhile, ‘the rule of six’ will apply outdoors.