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Wed 18th Apr 2018 - Restaurant numbers hold up, licensed premises fall just 0.3% as drink-led venues lead closures
Restaurant numbers hold up, licensed premises fall just 0.3% as drink-led venues lead closures: Restaurant numbers have held up while there was only a small decline in licensed premises in 2017, according to the latest Market Growth Monitor from CGA and AlixPartners. Many casual dining brands continued to expand on British high streets over the past year, despite the host of challenges facing the eating and drinking out sector – fuelling concerns about market saturation. The monitor revealed Britain had 122,221 licensed premises at December 2017– a drop of just 0.3% on 12 months earlier, despite mounting cost pressures, weak market confidence and uncertainty over Brexit. The bulk of closures of licensed premises in 2017 were of drink-led pubs and bars, the monitor showed. But Britain’s casual dining brands remained in growth last year, with overall restaurant numbers rising by 0.6% in the year to December. The country now has 16.7% more restaurants than it did in December 2012, underlining the growth of the sector. The monitor also pinpointed high streets as the leading source of this growth for restaurant operators. The number of licensed premises on high streets increased by 0.6% in the year to December 2017 compared with declines of 0.8% and 0.2% in suburban and rural areas respectively. CGA’s recently published 2018 Business Leaders’ Survey suggested many operators will now be scaling back their new opening plans over this year. Concerns about market saturation and rising property costs, especially among food-led operations, as well as people and food costs are likely to dent the number of licensed premises in 2018. But while several high-profile casual dining brands have announced closures recently, the monitor provided a reminder not all are turning off the tap – as the long-term picture has been of steady growth. The monitor also showed growth in the north west, with the Granada region increasing its number of food-led licensed premises by 2.9% in the year to December 2017. Meanwhile, it revealed tough trading conditions in outer London, where total licensed premises fell 1.9% in the year compared with 0.6% growth in inner London. There was also consistent growth in food-led pubs and bars, whose numbers have increased by 4.7% since December 2012. AlixPartners managing director Graeme Smith said: “With some casual dining operators announcing restaurant closures at the start of 2018, there has been much talk of oversupply in many of Britain’s cities and towns. But where exactly is supply exceeding demand? With consumer habits changing so fast, it can be hard to tell – but the Market Growth Monitor shows some of the places that have been particular targets for new openings in the past five years. Top of the list is Solihull, where the Touchwood retail centre has been a magnet for casual dining brands. Second and third are Milton Keynes and Chelmsford – both towns in which closures have been announced recently. Milton Keynes has about 28% more food-led licensed premises than it did a year ago, and may well be at risk of saturation –though its popularity as a place to live among professionals and young families continues to increase. Darlington, Shrewsbury and Loughborough have also seen a steep rise in new restaurants –although it could be argued that these towns were previously badly underserved by operators. At the other end of the spectrum, Oldham, Wrexham, Rotherham and St Helens have all seen a double-digit fall in licensed premises in the past five years. In all cases, most closures have been pubs rather than restaurants. For all brands, selecting the right towns for openings will be more important than ever.” CGA vice-president Peter Martin added: “2018 is shaping up into a tough year for pub, bar and restaurant operators, and CGA’s Business Leaders’ Survey suggests we may not have seen the last of closures from some of our biggest casual dining brands. Operators are reining in expansion plans and are predicting an increase in business failures. But our latest Market Growth Monitor is a reminder of the underlying strength of the sector despite the perfect storm of challenges that has been whipped up. People are still going out to eat and drink, and operators who can deliver value for experience and select the right locations for their new openings can still thrive.”


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