Winners and Losers in Hospitality During the Covid-19 Pandemic
The Covid-19 pandemic was a seismic event for the hospitality industry, reshaping its landscape and forcing businesses to adapt in unprecedented ways. While some companies emerged stronger, others struggled to survive the prolonged closures, shifting consumer behaviors, and supply chain disruptions. Based on Propel newsletters, here’s an analysis of the key winners and losers in UK hospitality during the pandemic.
Winners
1. Loungers
Why They Succeeded: With their community-focused locations and adaptable format, Loungers quickly pivoted to provide takeaway and delivery services. Their strong financial health pre-pandemic allowed them to weather the storm and even expand.
Results: Loungers grew from 165 sites in 2020 to over 200 by 2022, demonstrating resilience and adaptability.
2. Deliveroo and Just Eat
Why They Succeeded: Delivery platforms experienced exponential growth as dine-in options were unavailable. Restaurants partnered with these platforms to maintain revenue streams.
Results: Deliveroo reported a 64% increase in UK orders during 2020, solidifying its role as a crucial intermediary for restaurants.
3. Burger King UK
Why They Succeeded: A focus on drive-thru and delivery services helped Burger King UK maintain operations and appeal to consumers avoiding indoor dining.
Results: Franchisees invested in expanding drive-thru capabilities, with revenues bouncing back to pre-pandemic levels by late 2021.
4. Pret A Manger
Why They Succeeded: Despite early struggles due to office closures, Pret introduced innovative subscription models and diversified into supermarkets.
Results: The subscription program attracted 16,500 new users in its first month, providing a steady revenue stream.
5. Pubs with Outdoor Spaces
Why They Succeeded: Venues with outdoor seating were among the first to reopen, capitalizing on consumers’ desire for safe socialization.
Results: Many pubs reported strong summer sales in 2021, driven by pent-up demand.
Losers
1. Casual Dining Chains (e.g., PizzaExpress, Prezzo)
Why They Struggled: Heavy reliance on in-person dining and high overheads left these brands vulnerable. Many entered administration to restructure.
Impact: PizzaExpress closed 73 locations, and Prezzo shuttered 22 sites in a bid to reduce costs.
2. Nightclubs and Late-Night Venues
Why They Struggled: Prolonged restrictions on nightlife meant nightclubs were among the last to reopen. Many venues faced insurmountable financial pressures.
Impact: Over 20% of UK nightclubs permanently closed by 2022.
3. Independent Restaurants
Why They Struggled: Smaller operators lacked the financial resources to pivot effectively. Rising costs and inconsistent demand made recovery difficult.
Impact: Thousands of independents closed permanently, significantly altering the industry’s makeup.
4. Travel-Dependent Hospitality (e.g., Airport Hotels)
Why They Struggled: International travel bans and reduced domestic travel decimated demand for airport hotels and travel hubs.
Impact: Revenue per available room (RevPAR) in airport hotels dropped by over 70% in 2020.
5. Buffet Restaurants
Why They Struggled: Health concerns and changing consumer preferences led to a steep decline in buffet dining.
Impact: Many buffet chains, including popular brands, closed locations or shifted to table service models.
Key Learnings from the Pandemic
Adaptability is Crucial: Businesses that embraced delivery, takeaway, and digital platforms outperformed those that relied solely on traditional formats.
Financial Resilience Matters: Strong balance sheets allowed winners to invest in new opportunities and navigate prolonged closures.
Consumer Behavior Shifts: The pandemic accelerated trends like digital ordering, subscription models, and demand for outdoor dining.
Conclusion
The Covid-19 pandemic reshaped UK hospitality, creating stark contrasts between winners and losers. While some businesses thrived through innovation and adaptability, others succumbed to the challenges of a rapidly changing environment. As the industry rebuilds, the lessons learned during this period will shape its future trajectory.
Strengthening Hospitality Resilience with Smarter Procurement – Meet Percy
The Covid-19 pandemic underscored the importance of agile supply chains, cost efficiency, and operational adaptability in hospitality. Businesses that optimized procurement, reduced waste, and streamlined supplier management were better positioned to survive industry upheavals. Percy, an AI-driven procurement platform, empowers hospitality operators by analyzing purchasing trends, tracking supplier costs, and uncovering cost-saving opportunities—essential for navigating economic uncertainty and market disruptions.
Want to future-proof your restaurant, café, or hospitality business? Discover how Percy can help.