Hospitality sector closures in Britain have slowed this year thanks to a “modest revival” in independent restaurants and dining out, a new report has revealed.
There were an average of four closures a day in the first quarter of 2024, according to the latest Hospitality Market Monitor by CGA by NIQ and AlixPartners, which is down from an average of eight a day in 2023.
Despite the market being down by 2.5 per cent year-on-year, with one in 40 venues shutting in the past 12 months, the report signals a slow yet positive return to “cautious confidence” for the hospitality industry as cost of living pressures begin to ease.
Karl Chessell, director at CGA by NIQ said: “After a very challenging few years, these numbers give grounds for tentative optimism that hospitality closures will slow as 2024 goes on.
“While thousands of businesses remain fragile, a downward trend in inflation should hopefully raise the confidence of operators, consumers and investors alike, and protect more venues from closing the doors.
“It is particularly encouraging to see a marginal return to new openings for both casual dining and independent restaurants, though sustained growth is likely to be some way off.”
Despite some forced closures so far this year, the report said many of the vacancies were quickly taken over by new business operators.
Seven out of 10 cities in the UK now have “more licenced premises” than in 2023.
Graeme Smith, AlixPartners’ managing director and head of leisure, corporate finance, said the “headline rates” are the “most meaningful proxy” in assessing the health of the industry at large.
Smith added: “While the number of venues continues to tick down overall, the rate has slowed significantly, and hopefully this a further sign of the easing of some of these big market pressures.
“Operating conditions are clearly not easy, but the volatility of recent years has calmed.”