50,000 licensed premises could stay shut even after national lockdown ends

As many as 50,000 licensed premises could keep their doors closed after the end of the national lockdown and the start of the new tiered restrictions in England on Wednesday, a new study revealed.

The Market Recovery Monitor from research consultancy CGA and AlixPartners states it “lays bare the scale of the challenge” facing restaurants, pubs, bars and other venues in the holiday period, despite assurance from government of some “limited financial help” for drinks-led pubs.

It was referring to an announcement on Tuesday by UK prime minister Boris Johnson’s that a one-off payment of £1,000 ($1,335) would be made available to “wet pubs” — those that don’t serve food — as he noted that the hospitality sector has been hit hard in the pandemic.

Wet pubs will be unable to open if they are in Tier 2 or Tier 3 areas under the new system of restrictions from 2 December.

The move was slammed by representatives of the hospitality industry and small businesses for not going far enough.

Research for the Monitor showed that just 2,227 licensed premises — 2% of the total — are located in Tier 1 areas of England, where restrictions are lightest.

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Some 36,648 (39%) are in Tier 3 areas, where hospitality venues must close completely except for takeaways and deliveries.

The remaining 55,502 — or 59% — are in the middle ground of Tier 2 and subject to strict limits including a ban on selling alcoholic drinks unless they are served alongside substantial meals.

CGA’s research suggests that at least a third of operators in Tier 2 could be unable to trade while subject to these regulations. Combined with Tier 3 businesses, it means that more than 50,000 licensed premises in England may not open their doors this week.

Earlier, the CGA had said that only one in 16 of Britain’s licensed premises were trading at the end of November.

England’s hospitality sector was closed except for deliveries and takeaways, while 6,890 licensed premises in Scotland and Wales were open to guests — just 6.2% of Britain’s pre-lockdown total.

Some regions in Scotland remain subject to closures, meaning that only two in five (40.4%) of its sites were open. Numbers were only slightly higher in Wales (42.2%), despite some restrictions being eased after a 17-day lockdown, and they are likely to fall again when new trading limits are introduced later this week, the report said.

Karl Chessell, business unit director for food and retail at CGA, noted that “the experiences of Scotland and Wales show that a release from lockdown is no guarantee that businesses can reopen. Despite the end of England’s shutdown, the harsh tiered arrangements means tens of thousands of England’s premises are simply unviable in their most important trading month of the year.

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“The longer the system remains in place, the bleaker are the prospects for survival for many of these businesses,” he added.

AlixPartners managing director Graeme Smith said: “Much attention is being placed on what comes next given the messaging from the prime minister that restrictions will likely be in place well into the new year.”

Earlier, UKHospitality had said the new restrictions will see 98% of the hospitality sector in either Tier 2 (77%) or Tier 3 (21%), leading to a £7.8bn drop in trade for the whole of December if left unamended.

It had called for the “urgent, targeted” replacement of the government’s Job Retention Bonus, an extension of the rent debt moratoria and compensation of businesses for losses.

It also called for an extension of the current VAT cut, as well as a business rates holiday for the whole of 2021 “to enable businesses to rebound next year.”

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