Service: Deal Advisory 

Sector: Hospitality Retail 

Industry update: Hospitality | Restaurants 2021

06 Dec 2021

As the UK restaurant industry aims to recover from Covid-19, capitalising on the consumer desire to return to physical dining, workforce and supply chain issues, as well as the lingering threat of further Covid-19 restrictions, threaten to derail the sector’s recovery. 

For many sectors, the pandemic has been a recurring risk since March 2020, but none more so than the restaurant industry. Prolonged closures and uncertainty caused thousands of establishments to permanently close and continually changing rules and restrictions have made it difficult for business owners to plan ahead and operate smoothly. 

For our final industry report of 2021, partners Richard Kleiner, Nick Wallis, Richard Staunton, and Howard Woolf evaluate the last 18 months for the restaurant sector, analysing performance, recurring and new market trends, M&A activity, and the most prominent threats to be aware of. 

Key takeaways from our report include: 

  • The UK Hospitality’s Quarterly Tracker (compiled by CGA) estimates that industry revenue declined by 64% in the year to Mach 2021.
  • The pent-up demand is expected to drive growth in the sector with forecasted revenue growth of 128% in the year to March 2022 (Source: Ibis World)
  • The online food ordering industry may be considered a ‘winner’ of the pandemic, with revenue in the sub-sector increasing by 47% in 2021 (Source: Ibis World).
  • Revenue generated by the full service restaurant industry is estimated to have fallen by 66% in 2021 (Source: Ibis World). However, the sector is expected to ‘bounce back’ in 2022, where revenue growth is expected to be approximately 128% (Source: Ibis World).
  • In terms of the outlook, it is expected that there will be significant M&A activity in the sector as a rebased rental market and an increase in available sites may prove to be an opportunity too attractive to miss.
  • Threats to the sector include rebuilding the workforce, Brexit and supply problems and future Covid-19 restrictions that may once again force the closure of hospitality venues or running at a limited capacity.

To download the report, click below:

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