The coronavirus pandemic led to the permanent closure of 9,930 licensed premises last year, according to a recent report from CGA and AlixPartners.
With only 3,955 licensed premises opening for the first time in the UK last year, this resulted in a net decline of 5,975 sites in 2020.
This represents a 5.1% contraction in the market since the end of 2019, and a 175% increase on the 2,171 drop in sites that year. For every new licensed venue opening in the UK last year there were 2.5 closures, close to double the ratio of 1.3 in 2019.
The report highlights the significant impact the pandemic has had on the casual dining sector, where total site numbers dropped by 9.7% in 2020.
“Our report takes stock of the huge damage wreaked by the pandemic on the licensed sector in 2020. With stop-start trading for much of 2020 and a widespread shutdown during what should have been a bumper Christmas, nearly 10,000 licensed venues have not been able to make it through, and it is sadly inevitable that thousands more casualties will follow,” said Karl Chessell, CGA’s business unit director for hospitality operators.
“After such a bleak Christmas it is difficult to be optimistic about the market. But consumers are desperate to get back to eating and drinking out, and we can be confident that footfall and sales will return when the sector can finally reopen.
“In the meantime, the case for government support over the next few months is urgent and compelling. There are better days to come, but the sector will be in survival mode for some time yet,” he added.
AlixPartners’ managing director Graeme Smith added: “The wave of closures seen across the hospitality sector in 2020 have been devastating.
“Longer term this may bring opportunities for ambitious operators, by freeing up property and labour and reducing competition and costs.
“However, right now survival remains the name of the game. The government support that followed this latest lockdown is a drop in the ocean for many operators, who continue to accrue debt and burn through cash.
“Businesses, their funders, landlords and other stakeholders urgently need certainty and a roadmap to reopening. The rapid rollout of the vaccine offers hope, but with restrictions unlikely to be lifted until Easter at the earliest, the coming months will likely see more sites lost for good.”
