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Hospitality closures exceed Covid-hit 2021 levels as energy bills soar

Rocketing energy prices and spiraling food costs have caused pub and restaurant closures for 2022 to surpass pandemic-driven levels from the previous year, according to new data.

The latest hospitality market monitor from AlixPartners and CGA showed a decline of 1,611 hospitality premises over the fourth quarter of 2022.

Experts said the mass closures was largely due to rampant cost inflation, particularly through rising energy bills.

The closures represented a 1.6% contraction of the UK’s hospitality sector over the three-month period and was the equivalent of nearly 18 net closures each day.

Across the whole of 2022, hospitality recorded a drop of 4,809 premises, outstripping the fall seen in 2021 as venues were battered by pandemic restrictions.

Karl Chessell, CGA director for hospitality operators and food, said: “While Covid took a heavy toll on hospitality, these figures suggest the energy crisis is having an even more damaging impact.

“Given all the pressures, a drop of more than 1,600 venues in three months is quite shocking and every closure represents a sad loss of jobs and disappointment for communities and operators.

“Although consumers remain eager to visit pubs, bars and restaurants, thousands of vulnerable businesses are at risk after three years of turmoil from Covid and inflation.

The energy crisis has been described as an ‘existential threat to our pubs’ (Alamy/PA)
The energy crisis has been described as an ‘existential threat to our pubs’ (Alamy/PA)

“Urgent and targeted government support is needed to sustain them through what promises to be another very difficult year.”

Graeme Smith, managing director at AlixPartners, said: “These latest figures are a stark snapshot of what the sector has faced over the course of the past three years. Since March, 2020, 13,037 site closures – equivalent to 13 sites lost every day.

“While some segments have remained resilient, others have endured a more difficult time, with the casual dining sector, nightclubs and independent businesses suffering the highest closure rates, as costs and industrial action took their toll.”

Emma McClarkin, chief executive of the British Beer and Pub Association (BBPA) said: “The energy crisis is an existential threat to our pubs.

“These figures show how out of control costs and suppliers are. They are decimating hospitality and destroying the places we love.”