A total of 99,120 outlets were operating in December 2024, compared to 99,113 in December 2023, according to the latest Hospitality Market Monitor from CGA by NIQ and AlixPartners. This represents a year of solid consolidation after contraction in both 2022 and 2023, it concludes, when the licensed sector shrunk by 4.5% and 2.9% respectively.
However, the year-on-year comparison disguises substantial churn in hospitality, the report says, with many venues changing hands and some group-owned units switching to new formats. In total there were 4,078 closures and 4,085 openings over 2024 - a turnover equivalent to 11 venues a day.
Closures accelerated in the final quarter of 2024 due to mounting cost pressures and changing consumer habits. Site numbers contracted by 0.7% between October and December - an average of just over eight net closures per day - as cost pressures mounted and some consumers tightened their spending.
The last quarter contraction means 748 venues were lost in the three-month period. If this trend were to continue, it would represent a net loss of nearly 3,000 venues a year, according to the report.
The number of food-led venues fell by 0.7% year-on-year, however the total number of drink-led sites rose by 0.5%. The number of independently-run food-led sites grew 1.0% in 2024 compared to a 3.2% drop in the number of food-led venues run by multi-site groups.
Impressive resilience
“Given all the challenges that were thrown at hospitality in 2024, stability in site numbers shows the impressive resilience of operators,” says Karl Chessell, CGA by NIQ’s director for hospitality operators and food, EMEA.
“However, we continue to see a rapid churn of sites as the sector adapts to consumers’ changing habits, while hundreds of net closures in the final quarter of the year emphasise that the burden of costs, made even heavier by the Autumn Budget, is threatening hospitality’s fragile renewal.
“The long-term confidence of leaders, entrepreneurs and investors is solid, but January has already brought further closures of venues that clung on through Christmas. With economic uncertainty lingering, many more hospitality venues remain extremely vulnerable.”
Graeme Smith, AlixPartners’ managing director, says: “While we expect the consumer outlook to improve and M&A to build as we move further through the year, a significant number of businesses will remain vulnerable.
“The turnover of sites will continue too, we expect, as operators increasingly focus on core operations, close ancillary sites and reassess opening pipelines.
“Restructurings and rescue deals will be an inevitable and necessary feature of this stage in the business cycle.”