Licensed premises rise 0.7% in Q3 despite budget pessimism
The latest increase brings Britain’s total sites to 99,868, which was found to be just about level with the figure from 12 months ago
The number of licensed premises have risen for a second successive quarter by 0.7% between July and September, according to a new Hospitality Market Monitor from CGA by NIQ and AlixPartners.
This rise was equivalent to approximately 661 net new openings, or seven per day, and follows a 0.5% rise in the second quarter of 2024, which was the first positive quarter-on-quarter movement since mid-2022.
The latest increase brings Britain’s total sites to 99,868, which was found to be just about level with the figure from 12 months ago.
However, the monitor found that confidence for continued growth has been stifled by the government’s autumn budget, which added an increase in employers’ National Insurance contributions and a cut in business rates relief.
Hospitality’s recovery is particularly fragile in the independent sector, which has been weakened by the pandemic and high inflation, and is now 15.9% smaller than it was in March 2020.
After tracking every quarter for four years, it has now been in growth for two quarters in a row, and site numbers increased by 0.7% in the three months to September. However, the monitor revealed these added costs now put the revival of small businesses and start-ups in doubt.
Karl Chessell, director at CGA by NIQ, said: “Two successive quarters of growth in site numbers is an encouraging sign of hospitality’s strength in the face of major challenges. While the sector is smaller in outlet terms than before Covid, the last six months have shown that hospitality groups, investors and entrepreneurs have been confident enough to be opening rather than retrenching.
“With inflation, GDP and other economic indicators moving in the right directions, the sector should be looking forward to 2025 with guarded optimism. However, with substantial extra costs on labour and rates now looming, there is a real danger that hospitality’s momentum will be lost.”
Graeme Smith, MD of AlixPartners, added: “The hope is that the positive momentum of the past six months will not entirely stall, and that the sector will continue to recover. There is the hope that the increase in the National Living Wage may encourage customers to spend more and businesses should look to benefit from this while it lasts.
“With many businesses now looking to further consolidate their estates, market flux and churn may well create more opportunities for others.”
