Economics: Foodservice businesses proving resilient, retail expanding
29 January 2021ONS has tracked business demography (ie: business “births” and “deaths”) for some time, but only on an annual basis.
ONS has tracked business demography (ie: business “births” and “deaths”) for some time, but only on an annual basis.
More recently, this data has been made available quarterly, on an experimental basis, which allows us to examine the impact of the Coronavirus emergency on the business community.
Unfortunately, the quarterly data is not as granular as the annual version, making it difficult to dis-entangle food and grocery businesses from others.
Foodservice and accommodation are listed separately, however – and the numbers give room for guarded optimism.
Foodservice and accommodation services have been hit hard by Coronavirus, with sales collapsing. Nevertheless, “births” continued throughout 2020, albeit at a lower rate than in 2019, which suggests that some entrepreneurs (and their backers) still see promise.
“Deaths” amongst these businesses did not rise above the levels seen in previous years. This may be a result of government support (eg: business rate concessions) or a sign that some foodservice businesses are able to “hibernate” through hard times and may re-emerge later.
There were about 187,615 foodservice and accommodation businesses in the UK in 2019. With 20,905 “births” and 25,110 “deaths” in 2020, it seems that this population has contracted by 2%.
The rate of retail births (all activities) rose from 43,775 in 2019 to 62,245 in 2020. Retail deaths rose from 31,230 in 2019 to 36,295 in 2020. Since births exceeded deaths, the number of retail businesses in the UK increased in the latest year. ONS suggests that new retailers are likely to be online operations.
(Note 1: Business demography refers to business entities, not business locations. So, the birth of a new café chain with 10 sites would still count as “1”).
(Note 2: ONS warns that the quarterly statistics are not thought to be wholly-reliable. The annual data provides the “definitive” read).
Source: ONS, January 2021