Pubs and restaurants are still closing across the capital despite COVID19 lockdown restrictions being long gone. In comparison to most British cities, new research has found that since the pandemic begun, a higher proportion of pubs, bars, restaurants and nightclubs have shut down in central London.
Data from consultants CGA and AlixPartners reveals a 12% decrease in the number of licensed premises across British cities since March 2020. However, central London witnessed a more substantial decline of 15.6%, ranking it as the third highest percentage of closures. To put it into perspective, this translates to approximately 540 closures, which means that one establishment shut down every two days.
Even in the most recent quarter from December 2022 to March 2023, the number of venues in central London continued to decrease by an additional 1%.
The cost-of-living crisis
The cost-of-living crisis has had major impact on various businesses in the hospitality sector, including major chains. For instance, Italian restaurant chain Prezzo revealed plans to close one-third of its restaurants due to the soaring costs of pizza and pasta ingredients, as well as energy.
Karl Chessell, director of CGA, acknowledged the devastating impact of the pandemic on the hospitality industry, particularly in London, which heavily relies on office workers and tourists to drive sales. However, he expressed optimism in consumers’ continued desire to dine out and enjoy hospitality experiences, considering them an affordable indulgence.
VAT and business rates in central London also make it difficult for businesses to thrive. On average, some establishments need to generate approximately £20,000 a week just to break even. This is incredibly difficult for small businesses.
What can the Government do?
From extra financial support for businesses, to another Eat-Out-to-Help-Out scheme, people are calling on the Government to assist London’s hospitality sector. Moreover, the cost-of-living crisis is substantially hitting Londoners and has been continuously since last year. People and groups are therefore demanding the Government tackles rising inflation to allow people the financial freedom to support local hospitality establishments in the capital’s centre.
The impact of the pandemic and the cost-of-living crisis in London cannot be ignored. Businesses are suffering, not only due to financial loses during COVID19 lockdowns, but due to the fact that people are not able to spend as much as they once were. Food prices on average have soared 25% and people are struggling economically.
London also has large wealth disparities. It is crucial that local businesses in the centre are supported, to provide a sense of diversity, life and culture to the city.