Family-run pubs remain exposed after London hit hardest by Covid closures

Family-owned pubs and restaurants are bearing the brunt of a wave of business closures in the hospitality sector, which ran at one every two days in London, which was hit hardest by the Covid-era closures.

Publicans and restaurateurs in the capital will be hoping that the return of workers to offices after restrictions move further into the past and tourists and commuters alike work up a thirst from the West End to Canary Wharf. London lost 540 licensed premises in the three years to the end of March, or over 15% of its licensed hospitality venues.

The decline is now easing, largely thanks to the resilience of bigger companies. The managed outlets that they run are holding up better and slowing the overall decline.

But at a time of high energy costs and declining government support for business, London’s traditional landlords continue to face danger, even as trading rebounds more strongly within the M25 as commuters come back.

According to national numbers compiled by consultancy firms CGA by NIQ and AlixPartners, there was a net decline of 4,593 licensed premises in the UK in the year to March 2023. That’s over 4% of the sector and a rate of 12.6 a day.

But the better showing in the managed sector meant the rate slowed to 8.4 closures a day in the first quarter of this year.         Restaurants fared worse than pubs, with their number down 7.8% since March 2022, while the count of traditional boozers fell by 2.5%, with food pubs down 2.2%.

Graeme Smith, AlixPartners’ managing director said this “stabalising picture extends to London – the largest leisure market, which was most affected by Covid-19– and it’s clear that many of Britain’s city centres are returning to something comparable to their pre-covid vibrancy.”

Karl Chessell, CGA by NIQ’s director - hospitality operators and food, EMEA, called for more help for the sector.

“Hospitality has shown how, with the right backing, it can generate jobs and fire the economy—but sustained help is needed to tide the sector through the current crisis,” adding: “Each of the 4,593 closures over the last 12 months represents a sad loss of jobs and the permanent withdrawal of a community asset.”

Nightclubs fared worst of all, contracting by over 30%. Since the start of Covid, the overall independent hospitality sector has shrunk by over 14%, with managed houses down by just over 3%.