Hospitality returns to outlet growth in Q2
According to CGA by NIQ and AlixPartners, this is the first such rise since mid-2022, and only the third since the start of the pandemic
The hospitality industry has recorded its first quarter-on-quarter growth in outlets in two years, according to the new Hospitality Market Monitor fry CGA by NIQ and AlixPartners.
It comes as a 0.5% rise in the number of licensed premises between March and June of this year has resulted in 462 net new openings, or five per day.
According to CGA by NIQ and AlixPartners, this is the first such rise since mid-2022, and only the third since the start of the pandemic.
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% or 969 from June 2023. Britain’s total sites are still 13.8% below the pre-pandemic figure of March 2020.
The latest Hospitality Market Monitor has highlighted “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 as of March 2020 – at which point the pandemic and high inflation saw the segment slashed by 24.1% to 5,082 sites by June 2023. This spelled a total of 1,611 net closures, or just over one per day.
This decline appears to be bouncing back, however, as 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.
Karl Chessell, director of hospitality operators and food EMEA at CGA by NIQ, said: “These numbers are a welcome sign of the confidence of business leaders and investors in hospitality.
“While it’s too early to be sure that hospitality’s downward trend in outlets has bottomed out, alongside solid sales growth over the first half of 2024 these figures indicate the brightest outlook for the sector for some time.”
Graeme Smith, managing director at AlixPartners, added: “It is pleasing to see that with the easing of pressure around labour shortages, food and drink inflation and high energy prices, the industry has responded with a return to outlet growth across the sector in the second quarter of this year.
“The return to outlet growth reflects the stabilisation of the market and paints a more positive picture for businesses and investors alike, with this growth acting as a marker for the recovery of the industry. We expect to see this growth develop as confidence continues to rise in the second half of the year.”
