Revolution’s Closure Announcement
Revolution, a prominent bar chain, has revealed plans to shut down eight of its establishments across England, citing the persistent strain faced by its younger customer base due to escalating living expenses.
Among the affected sites are Revolution Bar outlets in Beaconsfield, Derby, Reading, St Peters Liverpool, and Wilmslow, along with two Revolucion de Cuba venues in Sheffield and Southampton, and the Playhouse in Newcastle-Under-Lyme.
Despite the closure decision, Revolution will continue to operate 22 pubs and 58 bars.
Financial Overview and Trading Performance
The announcement comes despite Revolution reporting its most successful Christmas trading period since 2019, marked by a remarkable 9.0% increase in like-for-like sales in December. However, the company experienced a 2.8% decline in like-for-like revenue over the six months leading up to December’s end.
Chief Executive Rob Pitcher highlighted the disproportionate financial impact on younger customers due to the cost-of-living crisis, coupled with the impending substantial increase in the national living wage set for April 2024.
Rationale Behind Closures
Pitcher elaborated on the decision to close unprofitable bars, emphasizing the necessity of this step for the company.
He praised the efforts of their teams in providing exceptional guest experiences and highlighted the positive response when customers can afford to celebrate at their venues, expressing optimism for future prospects.
Future Reports and Industry Context
Revolution is set to release a trading update for the first half of its financial year on January 24. This move aligns Revolution with several other chains facing challenges due to rising costs caused by high inflation.
JD Wetherspoon, for instance, previously closed multiple pubs and recently announced the sale of 11 additional branches, citing customers opting for cheaper supermarket beverages over pub outings.
Challenges Across Hospitality Industry
Apart from bar closures, the wider hospitality industry is grappling with similar issues, as rising energy bills, ingredient costs, and rent difficulties hinder restaurants’ ability to attract customers.
High-profile closures of well-known establishments such as Simon Rimmer’s Greens in Manchester and Tony Rodd’s Copper and Ink have been announced, further underscoring the challenges faced by restaurants. Manchester’s nightlife representative, Sacha Lord, warned that these closures might represent just the beginning, urging government intervention to support struggling restaurants.