Britain has suffered a net decline of 4,593 licensed premises in the last year to March 2023, the new Hospitality Market Monitor from AlixPartners and CGA by Nielsen IQ shows – but the resilience of managed groups means the rate of closures has slowed in the last quarter.

The drop is equivalent to 4.3% of the licensed sector since March 2022, and an average of 12.6 closures a day. However, net closures slowed to 756 venues in the first three months of this year – a quarter-on-quarter drop of 0.7%, and equivalent to 8.4 closures a day.

While the number of pubs, restaurants and other licensed venues continues to contract in UK hospitality, there is some positivity in this latest analysis of the market, given that the overall cadence, or rate of decline, has slowed significantly.

Underpinning this is the fact that the rate of closures in all major cities is reducing, as COVID concerns subside and workers and tourists steadily return to urban centres – even, to a degree, on Mondays. This stabilising picture extends to London – the largest leisure market, which was most affected by the pandemic – and it’s clear that many of Britain’s city centres are returning to something comparable to their pre-pandemic vibrancy.

Tellingly, our latest study also underlines the growing divide between larger and smaller operators, reflecting the varied ability to withstand the continued headwinds the sector faces. 

Independent businesses have borne the brunt of closures with a 5.9% drop in numbers over the last 12 months, while managed groups achieved growth of 1.5%. In the three years since the start of the pandemic, the independent sector has shrunk by 14.1% – more than four times the contraction of 3.3% in the managed sector, reflecting both the vulnerability of small, often family-run businesses in the face of COVID and the cost-of-living crisis, as well as the resilience of better resourced pub, bar, restaurant, and hotel groups. This closure rate of independent businesses – the lifeblood and entrepreneurial driving force of the sector – highlights the need for government support to be extended, especially on energy costs, if small businesses are to survive.

On a 12-month view, the number of closures is still very significant. A statistic homing into view is that, by the end of this year, the total number of licensed venues is likely to fall below 100,000 for the first time in many decades. It reflects approximately 13,000 closures since March 2020, and the many thousands of pubs that have shut in the decades prior.

This is a trend that speaks to the relative shift from high-frequency drinking occasions, which have in part made way for the growth in (less frequent, higher spend) dining-led visits, and the rise, in recent times, of (less frequent, higher spend) competitive socialising occasions.

Read our full Hospitality Market Monitor report below: