Number of licensed premises grows quarter-on-quarter for first time in more than five years but still down in excess of 8,000 on pre-pandemic levels: Britain’s hospitality sector grew modestly in the last quarter of 2021, the new Market Recovery Monitor from CGA and AlixPartners reveals – but tough trading conditions now threaten to halt the sector’s upturn. The Monitor recorded a 1.6% increase in site numbers between September and December 2021 – the first quarter-on-quarter growth for more than five years. It highlights particularly encouraging growth of 1.8% in the number of independent venues, which have been vulnerable to closure during lockdowns and restrictions since early 2020. The report also indicates a 1.9% increase in venues in both city centres and on high streets, where footfall has suffered since the start of the pandemic. However, the Monitor emphasises COVID-19’s damage to hospitality and reveals the fragility of the sector’s recovery. Britain now has more than 8,000 fewer pubs, bars, restaurants and other licensed venues than in March 2020 – equivalent to a net loss of around 13 sites a day. Despite fourth-quarter growth, the future of more hospitality businesses is now under threat after a collapse in sales over Christmas and new year, as concerns about the Omicron variant spread and fresh restrictions were introduced in Scotland and Wales, affecting more than 16,000 sites – equivalent to 15% of the British licensed market. The sector also faces a host of operational pressures, including rapidly rising food and energy costs, staff shortages and supply problems. Karl Chessell, CGA’s business unit director for hospitality operators and food, EMEA, said: “The increase in sites over the last three months of 2021 shows the remarkable resilience and entrepreneurialism of hospitality, and the enduring appeal of Britain’s pubs, bars and restaurants. But after disappointing December trading and challenges mounting, both new and established businesses are vulnerable as we begin 2022. These positive numbers show how hospitality is ready to kickstart Britain’s post-COVID-19 economy, but without urgent and sustained government support there is a real danger that recovery will stall.” Graeme Smith, AlixPartners’ managing director, said: “With 8,000 fewer sites in the sector than March 2020, it is clear the UK’s hospitality landscape has dramatically changed. There are, however, signs of light on the horizon. Ultimately, when the sector has the oxygen of being allowed to trade without restrictions – as was the case in England between July and mid-December – demand is strong, providing hope for a sustainable recovery.”

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