Insight

AlixPartners CGA Market Recovery Monitor

This quarterly monitor (formerly Market Growth Monitor) provides a snapshot of pub, bar and restaurant supply in Great Britain. All the data is drawn from CGA’s Outlet Index, a comprehensive, continually updated database of all licensed premises. The Market Recovery Monitor is delivered in partnership with AlixPartners.

Latest issue: September 2020

"Eat Out To Help Out" sparks cautious confidence in restaurant re-openings, but headwinds remain

Just over three quarters (76.3%) of all licensed premises across Britain were open for business again by the end of August. More than 15,500 venues re-opened throughout the month—equivalent to around 500 a day—marking an increase of more than 14 percentage points since the last edition of the Market Recovery Monitor.

In the food-led sector particularly, re-openings gathered momentum in August, thanks in large part to the government’s "Eat Out To Help Out" scheme, which has been critical in kick-starting the rebuilding of the hospitality sector, as well as the wider economy. Consumers were offered half-price food from Mondays to Wednesdays throughout the month, filling a lot of venues to capacity and increasing re-openings by nearly 21%. The scheme, and a reduction in VAT, prompted operators to re-open more of their venues sooner than they might have and benefit from the positive impact of robust August trading. By the end of August, more than four out of five (83.8%) casual dining restaurants were up and running.

Meanwhile, the growth in open pubs was modest, with 35,766 community, food and high street pubs open by the end of August (just a 6-7% increase), reflecting the fact that a much higher proportion (over 80%) opened during July. Re-openings were also slower in the bar sector—with only two thirds (67.2%) of venues open—and nightclubs—which have been impacted by social distancing limits more than most.

Looking at tenure, independent premises continue to lag, with only two thirds (68.2%) trading again in August, compared to nearly nine in ten (89.1%) managed outlets. Faring better is the leased sector, where more than nine in ten (92.8%) sites have re-opened.

In terms of location, August saw a leveling out of openings across England, with all regions now at between 71% and 80% of pre-pandemic capacity. Due to the later release of restrictions, Scotland and Wales both trail a little behind, though their pace of re-openings was well above the British average last month.

Central London in particular faces an ongoing struggle for footfall, with fewer than three quarters (71.2%) of premises open by the end of August, largely due to a significant reduction in the number of office workers and tourists. While numbers are expected to pick up, many operators may continue to delay re-opening or be forced into making difficult decisions on where they are able to operate profitably.

Despite the boost to re-openings of the "Eat Out To Help Out" scheme, site numbers will clearly remain well below pre-pandemic levels for some time to come. With the scheme finished, the next rent quarter due at the end of September, and the end of the lease forfeiture and debt enforcement moratorium fast approaching—along with the furlough scheme—major challenges remain. In addition, the Government’s restriction of gatherings to six people presents a further challenge to operators. In particular, for businesses that rely on larger groups gathering socially, such as wet-led and late-night venues, this creates an additional headwind.

The next few weeks will prove critical and start to highlight those businesses strong enough to ride out the storm.

READ THE SEPTEMBER ISSUE

"Eat Out To Help Out" sparks cautious confidence in restaurant re-openings, but headwinds remain

Just over three quarters (76.3%) of all licensed premises across Britain were open for business again by the end of August. More than 15,500 venues re-opened throughout the month—equivalent to around 500 a day—marking an increase of more than 14 percentage points since the last edition of the Market Recovery Monitor.

In the food-led sector particularly, re-openings gathered momentum in August, thanks in large part to the government’s "Eat Out To Help Out" scheme, which has been critical in kick-starting the rebuilding of the hospitality sector, as well as the wider economy. Consumers were offered half-price food from Mondays to Wednesdays throughout the month, filling a lot of venues to capacity and increasing re-openings by nearly 21%. The scheme, and a reduction in VAT, prompted operators to re-open more of their venues sooner than they might have and benefit from the positive impact of robust August trading. By the end of August, more than four out of five (83.8%) casual dining restaurants were up and running.

Meanwhile, the growth in open pubs was modest, with 35,766 community, food and high street pubs open by the end of August (just a 6-7% increase), reflecting the fact that a much higher proportion (over 80%) opened during July. Re-openings were also slower in the bar sector—with only two thirds (67.2%) of venues open—and nightclubs—which have been impacted by social distancing limits more than most.

Looking at tenure, independent premises continue to lag, with only two thirds (68.2%) trading again in August, compared to nearly nine in ten (89.1%) managed outlets. Faring better is the leased sector, where more than nine in ten (92.8%) sites have re-opened.

In terms of location, August saw a leveling out of openings across England, with all regions now at between 71% and 80% of pre-pandemic capacity. Due to the later release of restrictions, Scotland and Wales both trail a little behind, though their pace of re-openings was well above the British average last month.

Central London in particular faces an ongoing struggle for footfall, with fewer than three quarters (71.2%) of premises open by the end of August, largely due to a significant reduction in the number of office workers and tourists. While numbers are expected to pick up, many operators may continue to delay re-opening or be forced into making difficult decisions on where they are able to operate profitably.

Despite the boost to re-openings of the "Eat Out To Help Out" scheme, site numbers will clearly remain well below pre-pandemic levels for some time to come. With the scheme finished, the next rent quarter due at the end of September, and the end of the lease forfeiture and debt enforcement moratorium fast approaching—along with the furlough scheme—major challenges remain. In addition, the Government’s restriction of gatherings to six people presents a further challenge to operators. In particular, for businesses that rely on larger groups gathering socially, such as wet-led and late-night venues, this creates an additional headwind.

The next few weeks will prove critical and start to highlight those businesses strong enough to ride out the storm.

READ THE SEPTEMBER ISSUE

THE MARKET RECOVERY MONITOR ARCHIVE

August 2020

Three in five (62%) of Britain’s licensed premises were back in business by the end of July following the lifting of COVID-19 lockdown restrictions on 4 July. Reopening has been uneven across different segments, with pubs opening ahead of restaurants and London lagging behind the rest of England. 

 

May 2020

As Britain’s hospitality market takes a deep breath and tentatively looks to reboot from 4 July, the scale of the toll taken by the COVID-19 crisis is still unclear, with most operators suggesting a phased approach to re-openings.

 

March 2020

There are mixed fortunes for Britain’s pub and restaurant industries as we move into a new decade, with December seeing the lowest rate of year-on-year decline for pubs, bars and other licensed premises since 2018, but closures continuing.

 

December 2019

As Britain continues to lose around seven licensed premises a day, there are small signs of a slowdown, with year-on-year decline at its lowest since June 2018. Drink-led community pubs and locals continue to bear the brunt of closures, shutting at an average of 19 a week.

 

August 2019

The number of licensed premises in Britain is continuing a steady year-on-year decline, with 2,920 fewer than 12 months ago. Our latest Market Growth Monitor also shows a drop in restaurant numbers and a move from the leased model of drink-led pubs. But it’s not all doom and gloom, some types of cuisine are flourishing, and emerging food trends could be good news for group restaurants.

 

May 2019

This quarter's Market Growth Monitor shows that the UK has 2,753 fewer pubs, bars, restaurants and other licenced premises than 12 months ago. The 2.3% decrease over the last year—the equivalent of approximately 53 closures per week— is the seventh successive quarter of year-on-year decline, although the pace has slowed from the 3.1% decrease as reported in last quarter’s edition.

 

February 2019

This quarter's review of the Market Growth Monitor shows the UK has 3,847 fewer pubs, bars, restaurants and other licenced premises than 12 months ago. The 3.1% decrease over the last year—the equivalent of more than 10 net closures per day—continues the trend of net closures for the fourth quarter in a row.

 

December 2018

This quarter's Market Growth Monitor shows that the UK has 3,878 fewer pubs, bars, restaurants and other licenced premises than 12 months ago. The 3.2% decrease over the last year—the equivalent of more than 10 net closures per day—marks an acceleration of closures for the third quarter in a row. The 3.2% decline in the year to September 2018 follows a 1.3% fall in the year to March 2018 and a 2.5% drop in the year to June 2018.

 

September 2018

This quarter's Market Growth Monitor shows that the UK has 3,116 fewer pubs, bars, restaurants and other licenced premises than 12 months ago. The 2.5% decrease is the equivalent of an average eight net closures per day over the last year. 

 

June 2018

For the first time since the launch of the Market Growth Monitor, the total number of restaurants in the UK has dropped over the last 12 months – a culmination of market conditions and competitive pressures.

 

April 2018

1-year and 5-year movements in site numbers over a range of industry sub-sectors and shows that although total licensed premises remained relatively flat, many restaurant brands continue to grow, despite challenging conditions.

 

December 2017

Britain’s number of licensed premises remained level in the year to September 2017 despite rising challenges for pub and restaurant operators.

 

September 2017

Dynamic new restaurant operators continue to expand and disrupt Britain’s eating out sector despite a host of challenges.

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