Thousands Hospitality Businesses At Risk After ‘Freedom Day’ Delayed

Around 25,000 licensed premises were still shut at the end of May 2021, the latest edition of the Market Recovery Monitor research from CGA and AlixPartners reveals—and the delay to a complete reopening of hospitality puts a significant number of them at risk of permanent closure.

The exclusive research shows that 76.2% of Britain’s licensed sites were trading by the end of last month, with the number more than doubling from April’s total of 32.9% thanks to the return of inside service. However, while more than nine in ten venues in segments including food pubs (91.9%), high street pubs (92.9%) and casual dining restaurants (93.9%) are now open, figures are much lower in sectors that rely on late-night trading, like nightclubs (49.9%) and bars (72.9%).

With strict restrictions including distancing and table service in place, CGA’s trading data shows that sales have been well below pre-COVID-19 levels in these segments in particular. The four-week delay to a full easing of trading restrictions in England until 19 July, with Scotland likely to follow a similar path, places many closed businesses in jeopardy of failure.

Karl Chessell, CGA’s director for hospitality operators and food, EMEA, said: “Britain already has nearly 10,000 fewer licensed premises than before the pandemic, and that number will sadly rise as a result of the government’s delay. Coming as it does on top of a mountain of challenges on debt, tax, rising costs, recruitment and much more, hospitality now deserves sustained financial backing to save thousands of businesses and jobs, and the government’s extension of the ban on commercial evictions of tenants is a welcome first step. The hospitality sector’s recovery is central to the UK’s economic revival, and more support like this is vital if we are to prevent further casualties.”

Graeme Smith, managing director at AlixPartners, said: “Many operators will have reopened in anticipation of restrictions falling away on 21 June, and likely forecast and accepted suppressed trade for the period up to that point. While far from ideal, knowing that ‘Freedom Day’ was on the horizon meant operators could battle through this challenging time, perhaps welcoming team members back to the business in anticipation and getting operations up to speed. A further delay of four weeks is a devastating blow, creating significant uncertainty and further financial strain. At a time when Euro 2020 is in full swing and there is a feelgood factor across the country, this extension to restrictions could not have come at a worse time for pubs and other drink-led venues.”