Our latest Market Recovery Monitor has revealed that Britain’s licensed sector has stabilised in the second quarter of 2022, with overall licensed premises numbers at the end of June 2022 almost exactly the same as they were in both June 2021 and March 2022 (c.106,000).

In the context of the past two years and the shock of COVID, the stability of these numbers is very welcome. Clearly, after the challenges of the pandemic, the industry is still in recovery mode and adjusting to various challenges, such as clear shifts in demand, brought about by some significant changes to the operating landscape. 

This is graphically illustrated with the impact evolved working patterns and indeed the work-from-home culture has visibly had on bar and restaurant numbers in business districts, particularly in London.

The city has been slower than others to recover from the pandemic yet has been in fractional growth over the last 12 months. However, while analysis reveals a robust performance in northern and eastern parts of the capital – where many businesses have benefited from the growing number of residents working from home – parts of central London have suffered from a shortfall of office workers – including the City of London, which now has 14% fewer sites than in March 2020.

While the fundamental, longer-term outlook for the sector is strong, there are clearly some near-term challenges, and it is highly likely that a higher degree of volatility will return. Many businesses are experiencing a significant step change in their cost base due to sharp rises in food and energy prices, in addition to persistent labour shortages and supply chain issues.

With the Bank of England forecasting recession, consumer discretionary spending will likely come under further pressure, too. For the sector, this will inevitably mean more closures and more churn, but significant market share opportunities for the strongest businesses and best brands.