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Graeme Smith
Partner & Managing Director, EMEA Leader, Risk Advisory
London
Britain’s hospitality sector has recorded its first quarter-on-quarter growth in outlets in two years, the new Hospitality Market Monitor from AlixPartners and CGA by NIQ reveals.
The exclusive report shows a 0.5% increase in the number of licensed premises between March and June 2024 – equivalent to 462 net new openings, or five per day. It is the first such increase since mid-2022, and only the third since the start of the pandemic in early 2020. Second-quarter growth was even across the different sectors of hospitality and extended to the independent segment, where numbers increased by 0.5% to end several years of sustained closures caused by severe cost and COVID-related pressures.
The upward trend is in line with other positive indicators from 2024, including solid growth in sales as measured by CGA by NIQ’s Trackers, plus an easing of inflation and household bills. However, while quarter-on-quarter movements are positive, longer-term comparisons are weaker, with outlet numbers down by 1.0% or 969 from June 2023. Britain’s total sites are still 13.8% below the pre-COVID figure of March 2020.
The latest Hospitality Market Monitor from CGA and AlixPartners highlights particularly positive developments in the casual dining sector. After a rapid expansion of managed chain restaurants in the 2000s and 2010s, there were 6,696 casual dining sites at March 2020—but COVID-19 and high inflation then saw the segment slashed by 24.1% to 5,082 sites by June 2023—a total of 1,611 net closures or just over one per day. However, the figure has risen by 1.7% in the last 12 months, with an average of three net new sites a week in the first six months of 2024.
Graeme Smith, AlixPartners’ managing director, said: “The easing of the very significant pressures that have challenged businesses for the past 18 months – including spiralling energy costs, rising food, drink and labour inflation, and higher interest rates – has paved the way for a far more positive outlook, as this latest Hospitality Market Monitor reveals.
“These latest figures revealing a return to outlet growth across the sector speak to a growing sense of calm, and a normalisation of the market. It’s especially encouraging to see such significant growth in the themed bar segment, which has seen a rise in outlets over the last year following the continued popularity of experiential leisure and the demand from consumers for elevated experiences when socialising out of home.
“While it’s clear that businesses of all sizes are still experiencing significant challenges, this ongoing stabilisation of the market paints a positive picture for businesses and investors alike, with this growth acting as a marker for a recovery of the industry. We expect confidence to continue to build in the second half, as growth takes hold and investment continues to flow.”
Read our full Hospitality Market Monitor report below:
