INSIGHT: 5 headline trends shaping pub, bar and restaurant supply in the UK market

The number of restaurants in Britain fell by 0.4% in the year to March, according to the latest Market Growth Monitor from CGA and Alix Partners.

This decline comes amid fears among many operators of oversupply of sites in the market and is a sign of the challenges that are currently faced by casual dining operators, following a sustained period of new openings.

Market Growth Monitor data shows that restaurant numbers rose by 15.6% since March 2013, but planned site closures by several major brands have now helped to contribute to a fall over the last 12 months. The 0.4% decline is equivalent to nearly two net closures a week in the restaurant sector.

Here are there the five headline Market Growth Monitor messages for pub, bar and restaurant supply in the UK:

1. A 1.3% drop in total number of licensed premises in the last year

CGA’s data shows there were 120,662 pubs, bars, restaurants and other licensed premises at March 2018—1.3% fewer than in March 2017. That represents 1,619 net closures in a year, or an average of more than four a day. It also marks an acceleration in the pace of closures since the last edition of the Market Growth Monitor, which recorded a 0.3% drop.

 

2. Restaurant numbers starting to fall

The Market Growth Monitor has recorded steady growth in restaurants, many of them from casual dining groups, and their numbers have risen by 15.6% in just five years. But the last year has been much tougher, and CVAs and closures from a handful of brands have contributed to a 0.4% fall in numbers since March 2017. Further cutbacks seem likely over the rest of 2018. However, this masks the fact that many casual dining operators—especially newer and distinctive ones—remain firmly in expansion mode.

 

3. A north-south divide – but not as we know it

The usual economic narrative of recent years has been the buoyancy of London, the south east and the difficulties of northern regions. But in the licensed trade, the last year looks rather different. Numbers of licensed premises in South England have fallen by 2.1% since March 2017, compared to only 0.5% in the north. This is perhaps a consequence of saturation in the south, where many towns and cities have a greater concentration of pubs, bars and restaurants. Further north, Scotland is the only area to have recorded growth over the last five years, of 0.8%.

 

4. Entertainment venues up, circuit bars and locals down

In the drink-led sector, circuit bars and community locals have borne the brunt of closures, with their numbers down 18.6% and 18.0% respectively over the last five years. The educational and nightclub sectors have suffered a steady stream of closures too. By contrast, entertainment venues, including theatres and cinemas, have seen numbers rise by 6.3% in the past year – equivalent to more than four net new openings a week. Over five years, growth is 37.0%. It suggests that many consumers are demanding more than simply a drink on their nights out.

 

5. Food replacing drink in rural areas

In rural areas of Britain, the five-year trend is of drink-led pubs and bars closing and more food-led pubs and bars opening. For instance, rural parts of southern England have seen numbers of drink-led venues fall by 7.9% since March 2013, while numbers of food-led ones have risen by 2.4%. In the North of England, the contrast is even sharper, with a 9.6% fall in drink-led sites but 6.0% growth in food-led ones.

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