Market Recovery Monitor – 7,000 licensed premises in Britain still in limbo post-‘Freedom Day’

The long-awaited ‘Freedom Day’ on 19 July marked the beginning of a new chapter for hospitality, with the focus for operators shifting to securing a return to viability after almost 18 months of closure and heavily restricted trading.

However, our latest Market Recovery Monitor has revealed that more than 7,000 licensed premises remain in limbo, yet to return to trading following this mid-July milestone. The question now must be whether these venues will ever reopen under their current ownership or be lost permanently. The well-publicised challenges in the market around labour and product supply only add to a complex picture during what should be peak trading season, with operators across the country taking drastic action through reducing their hours or closing as a direct consequence of these issues.

This month’s data does also show that 5,000 more of Britain’s licensed premises opened their doors again in July to bring the sector to more than nine-tenths of its capacity. The wave of reopenings was partly triggered by ‘Freedom Day’, which allowed many venues, especially nightclubs and late-night bars, to trade for the first time since March 2020.

Across Britain, 98,790 licensed premises were open by the end of July – 93.0% of the total known sites. This means that Britain’s licensed sector is now trading more widely and freely than at any time since March 2020, despite 7.0% of the total known sites yet to re-emerge.

We also see a stark divide in reopenings between eating and drinking venues, with 98.1% of all food-led sites now open – far more than the 91.4% of drink-led sites that are trading. This means that for every food-led venue that remains closed, seven drink-led ones still remain shut. Our data also shows that the independent sector is already 8.5% smaller in terms of outlet numbers than it was before COVID-19 hit, and sustained government support will be needed to avoid more contraction here.

As we move toward the end of summer and into autumn, what will be interesting to see is how a return to offices and other workplaces will impact the sector. Footfall is returning strongly in city centres and the overwhelming majority of venues in these locations have reopened. As the vaccination programme continues and more workers and commuters return, many operators should benefit from a pick-up in trade.

Investors also remain highly interested in the sector’s leading lights, as we witnessed recently when advising leading Vietnamese restaurant group, Pho, on the sale of a majority stake in its business to private equity firm TriSpan – a transaction that backs the business to continue its growth across the UK.