Brighter Times On The Horizon

Well nobody saw that coming!  This may seem an unusual way to start an article, but if you cast your mind back to this article 12 months ago, we thought that the industry had turned the corner, the dark days of Covid-19 were behind us, and there was plenty of opportunity to bounce back to profitability.

But how could we foresee the troubles that have hit the industry in the last 12 months?

With utility prices sky high, product prices rising as a result of suppliers carrying increased costs of production, the high rate of inflation hitting the pound in the pocket of many punters, and the chaos that followed September’s mini-budget, it became another increasingly tough year for many in the industry. With hindsight, it seems like the sector had walked out of a dark tunnel into the light, but that light was just the lightning flashes of the approaching storm!

But as always, this industry we love has been resilient and found a way forward. New outlets have popped up all over, from smaller microbusinesses (pubs and street food outlets), through to high end fine dining establishments, indeed it can easily be argued there has never been a better time to be a foodie in the region. Other areas of the industry have also continued to thrive, such as the holiday and caravan park market, where demand for sites is higher than ever and prices being paid are at all-time highs.

There has also been a strong uptick in the conversion of former retail space to leisure uses, so much so that statistics indicate the number of bars, large venues and high street units increased by 0.5%. Whist Pubs sit within a Sui Generis planning class, the introduction of Class E has allowed food focused operators to benefit from this relaxation in planning laws, and we’ve been pleased to see the opening of outlets such as NQ64 on Pilgrim Street and Four Quarters on Dean Street in Newcastle City Centre, which both build on the competitive socialising scene.

Licensing however remains tight in many city centre locations and as licensing authorities begin to review the pavement licences granted during Covid-19, there are no doubt some more changes to come.

That is not to say that there have not been closures of businesses, but the severity of closures was not as severe as many feared. The CGA/Alix Partners Report for October 2022 confirmed that total pub numbers in England & Wales declined by just 0.6% in the preceding 12 months (the increase in city centre venues, being offset by closures in the traditional wet led sector). This means that the total number of pubs would sit just short of 46,000 for the start of the year. These numbers, however, strongly suggest a distinct slowing in the rate of decline over the last 5 years.

Now whilst last year was undoubtedly hard work, there are still lots of positive things coming up. Once again, the RFL Magic Weekend returns to Newcastle, for an unprecedented 7th time, and the continued performance of Newcastle United, Middlesbrough and Sunderland will continue to ensure the hostelries of their respective town centres are full on match days. Music, Comedy and Theatre performances are back, audiences are growing and Sam Fender’s two nights at St James’ Park and Beyonce at the Stadium of Light will be the biggest shows the cities have seen for some time. Hopefully, the recent Business Rates Revaluation will result in reduced liabilities for operators, but even if your Rateable Value has not fallen, there are still ways to make sure that you are making the most of the savings available.

Whilst 2022 didn’t prove to be the year we all hoped, there’s every reason to think 2023 looks like it’s going to be another interesting year and hopefully, this isn’t another false dawn.

Article from our North East Leisure Supplement 2023, produced in conjunction with Sanderson Weatherall.

Sarah Smith, Head of Licensing and Gambling at Sintons – – 0191 226 4897.

David Downing, Partner at Sanderson – 0191 226 4897. 

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