The number of British foodservice establishments, including restaurants, pubs, bars and clubs, has fallen by 3.2% year-on-year to September 2018, with restaurant industry closures contributing 2%.
According to the latest Market Growth Monitor report by management services company AlixPartners and data insight consultancy CGA, the UK has seen a net fall of 539 restaurants to 26,892 restaurants, marking ‘an acceleration of closures’.
The fall in restaurant numbers is the equivalent to over 10 closures a week.
The number of independently-owned restaurants fell by 2.6%. The report found that family-owned restaurants, particularly those serving Chinese, Indian and Italian cuisines, have faced the impact of these closures the most.
Pubs and bars have closed at a faster rate than restaurants over the course of five years, with an 11.3% drop.
CGA vice president Peter Martin said: “The eating out sector has been one of the UK economy’s biggest success stories of the last decade, with casual dining brands growing at a phenomenal rate. But as our latest Market Growth Monitor shows, there are clearly limits to the country’s capacity. We have seen a steady flow of pub and bar closures for many years now, but the restaurant sector is now going through its own clear out.
“The bulk of closures are from independents, while managed groups remain in growth. This trend is welcome news for some of them, since it eases over-capacity and frees up more property. But these figures are a reminder that all restaurant brands need a well-defined and brilliantly executed offer if they are to succeed in a survival of fittest in 2019.”
The restaurant industry has seen some growth however, as the total number of managed restaurants has increased by 1%.
Small and medium-sized multi-site groups are also seeing growth, despite difficult market conditions. These groups have grown by 7.7% over five years.
AlixPartners managing director Graeme Smith said: “The figures in this edition of the Market Growth Monitor again illustrate that space remains for ambitious and innovative businesses to expand in areas outside of London. Pockets of growth are still to be found for businesses with a highly differentiated offer and strong focus on the guest experience.
“As ever, for operators to succeed, they need to show a deep understanding of their local communities and what will work for their customer base. Those who fail to meet these expectations will inevitably fall by the wayside. But for businesses in the sector looking to grow, there remain a multitude of options across both equity and debt and investors continue to see attractive opportunities.”