Licensed hospitality closures slow in 2024

Britain’s pubs, restaurants and hotels overcame widespread challenges to end 2024 with virtually the same number of premises as 12 months earlier.

Data from hospitality data and insight consultancy CGA shows a total of 99,120 outlets operating in December 2024, compared with 99,113 in December 2023.

It represents a year of solid consolidation after contraction in both 2022 and 2023, when the licensed sector shrunk by 4.5% and 2.9% respectively.

However, this total disguises the churn of venues as there were 4,078 closures and 4,085 openings over 2024, a turnover equivalent to 11 venues a day.

Closures accelerated in the final quarter of 2024 due to mounting cost pressures and changing consumer habits. Site numbers contracted by 0.7% between October and December, an average of just over 8 net closures per day.

This last quarter contraction means 748 venues were lost in the three-month period, and if this trend were to continue, annualised it would represent a net loss of nearly 3,000 venues.

While the number of food-led venues has fallen by 0.7% year-on-year, total drink-led sites have risen by 0.5%.

Independently-run food-led sites have been particularly robust, with growth of 1.0% in 2024 compared to a 3.2% drop in the number of food-led venues run by multi-site groups.

Karl Chessell, CGA by NIQ’s director – hospitality operators and food, EMEA, said: “Given all the challenges that were thrown at hospitality in 2024, stability in site numbers shows the impressive resilience of operators.

“The long-term confidence of leaders, entrepreneurs and investors is solid, but January has already brought further closures of venues that clung on through Christmas. With economic uncertainty lingering, many more hospitality venues remain extremely vulnerable.”

Graeme Smith, AlixPartners’ managing director, said: “The sector has learnt how to operate in tough times over the course of the past few years, and there is a sense that this ability will be tested again this year, becoming more important than ever. The changes to the national minimum wage, national insurance and business rates will render many marginal sites unviable and cause businesses to look at how to right-size their operations for this new environment.

“While we expect the consumer outlook to improve and M&A to build as we move further through the year, a significant number of businesses will remain vulnerable. The turnover of sites will continue too, we expect, as operators increasingly focus on core operations, close ancillary sites and reassess opening pipelines. Restructurings and rescue deals will be an inevitable and necessary feature of this stage in the business cycle.”