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Tue 21st May 2019 - Restaurant closures accelerate but wet-led pubs and bars bounce back
Restaurant closures accelerate but wet-led pubs and bars bounce back: The number of restaurants in Britain fell 2.8% in the year to March 2019, the latest edition of the Market Growth Monitor from CGA and AlixPartners reveals, with high streets in the south of England, excluding London, hit especially hard. The figure equates to net closures of 768 restaurants in 12 months or about 15 a week. It marks a fifth successive quarter of decline in the sector, bringing to an end a boom period that saw the number of restaurants grow more than 15% between 2013 and 2018. The majority of closed sites were independents but group restaurants also fell, by 1.1%. The pace of closures for group operators was significantly higher in the south of England (2.8%) than in the north (0.4%), a sign restaurant levels have “reached saturation point in many southern towns and cities”. Group restaurant numbers on British high streets, meanwhile, fell 2.4% in the 12 months to March compared, with net openings of 1.8% in suburban areas. However, while restaurants struggled the Market Growth Monitor revealed a more positive picture for wet-led pubs and bars. Three years ago the report found closures in the sector were averaging 31 a week but the rate tumbled to 13 a week in the 12 months to March 2019. With premium and all-day bars performing particularly well, it suggests Britain’s long-term clear-out of unsustainable pubs may be nearing an end. CGA vice-president Peter Martin said: “CGA research has charted a remarkable surge in restaurants over the past decade but our latest Market Growth Monitor makes it clear the gold rush is over. Some distinctive and resolutely customer-focused restaurant groups continue to flourish but, for brands that have over-reached or lost sight of their proposition and purpose, there are undoubtedly more tough times ahead. Major challenges on British high streets, such as rising costs and declining footfall, are adding another layer of difficulty.” AlixPartners managing director Graeme Smith added: “The positive take on this clear-out is ambitious and well-resourced operators now have more headroom for growth and the Market Growth Monitor identifies bright prospects for many groups in the drink-led pub and bar space in particular. Brands that can deliver a compelling premium drinks offer and strike the right balance with food have all to play for in 2019 and beyond. The next 12 to 24 months offer an opportunity for well-funded restaurant groups to expand into prime sites at much reduced costs and, if you can catch the right consumer wave, the returns are impressive.”


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