Britain’s licensed sector saw a net decline of one closure every hour in the third quarter of 2022, the latest Hospitality Market Monitor reveals.

It shows there were just under 104,000 licensed premises at the end of September 2022 – a net drop of 2,230 since June, which represents an average of just over 24 closures a day, or more than 150 per week.

This latest decline leaves the licensed market with 11,426 (or 9.9%) fewer sites than March 2020. It follows a year of relative stability as hospitality built back from Covid, with the number of sites at June 2022 virtually the same as 12 months earlier.

The report from CGA and AlixPartners reveals a sharp contrast in the fortunes of managed hospitality groups and independent operators.

While the number of managed sites is 3.0% below pre-Covid levels, it increased by 0.9% (up 179 sites) in the last three months, but the independent sector contracted by 2.6% (minus 1,751 sites).

High street, suburban and rural locations all recorded same net decline of 2.1% in licensed premises between June and September.

By region, quarter-on-quarter declines varied only slightly, from a low of 1.6% in the south and south east to a high of 2.9% in Scotland.

Britain’s number of nightclubs has fallen by 5.6% in the last three months alone, and the sector now has around a quarter fewer sites (down 309) than it did before the pandemic.

Karl Chessell, CGA’s business unit director for hospitality operators and food, EMEA, said:

“These numbers show how hospitality’s steady recovery from Covid is now under severe threat from rising costs for businesses and consumers alike. The resilience and confidence of managed groups and their investors is impressive, and people’s appetite for eating and drinking out is undimmed. However, thousands of smaller businesses are now on a knife-edge and in need of financial support.”

Graeme Smith, managing director at AlixPartners, added:

“This volatility will also inevitably trigger market activity as companies are forced to restructure and merge in order to find cost savings, and additionally, as those that can – with the strength of balance sheet and financial firepower – acquire other groups.”

UKHospitality chief executive Kate Nicholls said:

“It is truly saddening to see this scale of losses over the last quarter. UKHospitality forecast this summer that we could lose 10% of the industry if adequate support was not offered and it would appear that prediction is bearing true. There is no time to waste – there now needs to be considered and urgent action to ensure businesses can survive.”