UK hospitality venues back in growth amid casual dining revival

An average of five new hospitality venues opened each day over the past quarter.

(PA)

The number of UK pubs, restaurants, bars and hotels has returned to growth for the first time in two years, signalling green shoots for the hospitality sector in the face of a challenging economic backdrop in recent years.

New figures showed a particular improvement for casual dining restaurants, which saw numbers increase for the first time since the Covid-19 outbreak in early 2020.

CGA by NIQ and AlixPartners’ latest hospitality market monitor revealed there were 99,207 licensed hospitality operators across the UK at the end of June.

It meant the sector recorded 462 net new openings, or an average of five per day, between March and June.

This was the first quarter-on-quarter increase since 2022 and follows reports of improving sales from industry firms amid easing pressure on household budgets.

The latest uplift indicates there could be a recovery in the sector, but total outlets are still 1% lower over the past year, after almost 1,000 net closures.

The fresh rise in venues for the latest quarter was partly driven by a recovery for midmarket restaurants.

The research found that the number of casual dining restaurants grew by 1.7% over the past 12 months, with an average of three new sites a week over the past six months.

It follows a roughly 24% plunge in the number of casual dining restaurants over the three years after the Covid-19 pandemic spread.

The sector downturn led to major insolvencies at brands including Carluccio’s, Gourmet Burger Kitchen and Byron.

Karl Chessell, the director of CGA by NielsenIQ, said: “These numbers are a welcome sign of the confidence of business leaders and investors in hospitality.

“While it’s too early to be sure that hospitality’s downward trend in outlets has bottomed out, alongside solid sales growth over the first half of 2024 these figures indicate the brightest outlook for the sector for some time.

“Cost pressures mean thousands of businesses remain fragile and millions of consumers’ discretionary spending continues to be tight, and hospitality may never fully return to its pre-Covid size in outlet terms, but it’s clear that it is now back on a much surer path.”

Graeme Smith, managing director at AlixPartners, said: “The return to outlet growth reflects the stabilisation of the market and paints a more positive picture for businesses and investors alike, with this growth acting as a marker for the recovery of the industry.

“We expect to see this growth develop as confidence continues to rise in the second half of the year.”