The hospitality sector in central London is on the road to recovery, with London seeing a net decline of only 1% in its licensed premises in Q1 2023, according to the Hospitality Market Monitor from CGA by NIQ and AlixPartners.
Despite central London suffering hundreds of closures during the pandemic, the Coffer CGA Business Tracker has also backed the data, showing year-on-year growth within the M25 being twice as high as the rest of Great Britain in the first few months of 2023.
Central London saw a net decline of 540 licensed premises between March 2020 and March 2023 – 15.6% of the city’s pre-Covid total, and equivalent to one closure every two days.
However, the return of office workers and visitors since 2022 indicates the downward trend may be bottoming out, with a net decline of 1% in licensed premises in Q1 2023.
This follows a dip of just 0.2% in Q4 2022.
London’s city centre is by far hospitality’s most concentrated and significant market in the UK, with nearly 3,000 licensed premises—more than Britain’s six next biggest city centres put together.
Karl Chessell, CGA’s director for hospitality operators and food, EMEA, said: “This slowdown of closures is a very welcome sign for London’s hospitality scene, which was disproportionately hit by COVID lockdowns and working from home. London businesses still face some daunting challenges including high inflation and labour shortages, and more closures can be expected—but it’s clear that the sector is back on its feet.”
Graeme Smith, managing director at AlixPartners, said: “This stabilisation of such an important hospitality market is encouraging and clearly underpinned by a return of significant footfall to central London. We may see ongoing closures as more vulnerable and indebted businesses succumb to the demanding trading environment. However, we know that London remains a highly attractive market in the longer term, for strong operators with well-defined and differentiated propositions. As inflationary cost pressures ease, we would expect to see the capital return to site growth—possibly as soon as the third or fourth quarter of this year.”
