Overall decline in UK licensed premises but brands flourish in cities

Jo Turner

13 June 2017

Independent venue owners, and those looking to set up for the first time, are feeling the sting of increased property, food and people costs – along with the uncertainty of Brexit – while chains and managed houses are flourishing, particularly in the casual dining sector, says a newly published report.

The eighth edition of the Alix Partners CGA Peach Market Growth Monitor showed that the number of licensed premises in the UK fell by 1.2% in the year to March 2017 – but the number of managed licensed venues grew by 2.5%, with a sharper increase of 6% more managed restaurants.

The report, released quarterly, provides extensive and authoritative data on Britain’s bars, pubs and restaurants and is drawn from CGA’s Outlet Index, a comprehensive database of all licensed premises in Great Britain.

June 2017's edition confirms a long-term change in the landscape, away from independent venues and towards established and trusted brands.

‘Our latest Market Growth Monitor shows that while the eating and drinking out markets are facing some unprecedented challenges – the vast majority not of their own making – managed groups remain very much on the front foot,’ said CGA Peach vice president Peter Martin.

The overall decline in licensed venues can be accounted for mainly by ongoing closures in local and community pubs, as this sector continues to be squeezed by the smoking ban, cheaper supermarket alcohol and healthier lifestyle agendas.

It’s the fifth quarter in a row in which the Market Growth Monitor has recorded a decline in premises – with 1,527 closures, or four per day, over the last year.

‘Tired or complacent operators are struggling to stand still, but distinctive brands with great people, consistent delivery and the right price points continue to roll out. In the week of the General Election it is a timely reminder that ours is a resourceful, ambitious and economically vital sector,’ Martin added.

Many brands and concepts which emerged in London are now doing well in a regional context, with cities such as Manchester, Newcastle, Leeds, Bath and Cardiff now having between a quarter and two-fifths more food-led licensed premises than five years ago.

The report also shows that big cities are enjoying more success than large towns when it comes to new openings, with a 4.4% increase on city high streets but a 0.6% decline in large towns – and seaside towns in particular are struggling. Out of the 10 towns with most closures, three were the classic resorts of Weston-Super-Mare, Margate and Blackpool.

‘The reality is that owners will now be faced with returns on investment that have fallen back from the levels of 30-to-45% seen by successful operators through much of the past 10 years,’ said Paul Hemming, managing director of AlixPartners.

‘They will however remain at healthy levels when compared to many other industries. Whilst this means some business plans will need to be rewritten, the market-leading players will still offer highly attractive investment opportunities.’


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