Turnover in the UK hospitality sector was down by nearly £72 billion last year, equivalent to nearly £200m a day in lost sales for Britain’s pubs and restaurants.
According to new data from on-trade specialist CGA and UKHospitality, turnover in the UK on-trade in 2020 was less than half of 2019 levels, dropping by 54%.
Sales collapsed in the UK hospitality industry from £133.5bn in 2019 to £61.7bn in 2020. Prior to the pandemic the sector employed over three million people in the UK.
Sales from October to December 2020 were worth just £14.3bn – down by 57% on the last quarter of 2019. The stark figures highlight hospitality’s ongoing need for specific financial support from the government in order to survive the crisis.
With severe restrictions likely to remain in place for months, aid is urgently needed to prevent thousands of permanent on-trade closures.
Kate Nicholls, CEO of UKHospitality, said: “These figures are simply devastating; hospitality was hit first, hit hardest and continues to suffer because of pandemic restrictions brought in.
“And sitting behind this massive loss of revenue is the dreadful, real impact on people’s lives and livelihoods across all parts of the sector and supply chain.
“It is also yet another stark reminder of the importance of having an exit strategy from the current lockdown and providing ongoing support for sector businesses.
“Hospitality can and will bounce back and it’s in the interests of the government to support a sector that, in normal times, contributes many billions of pounds in tax to the Treasury and employs over three million people.
“We need the Chancellor to step up again in his forthcoming Budget to deliver a bold, wide-ranging package of financial support that ensures as many businesses and jobs as possible are saved and the sector returns to growth. An extension of the VAT cut and business rates holiday must be top of the menu.”
Phil Tate, group chief executive of CGA, added: “This is the clearest evidence yet of the shattering impact of the Covid-19 pandemic on the country’s hospitality industry.
“With every week of restrictions, the sector loses more than a billion pounds of sales, hundreds of businesses and thousands of jobs. Widespread closures over December, the busiest time of year for so many restaurants, pubs and bars, were a devastating final blow in a year of unprecedented challenges.
“With a vaccine rollout underway there is at least some light at the end of the tunnel, and this sector is well placed to help recharge the UK economy as 2021 goes on. But it will only be able to do so if it gets the extensive support that is now desperately needed to sustain it over the next few months.”
An in-depth interview with Kate Nicholls OBE on the impact of the pandemic on the hospitality industry and the best way forward for the on-trade will appear in the February issue of the drinks business