Additional cost pressures from government policy around NICs and taxation combined with tough market conditions saw venue numbers fall in the first half of the year, with two premises closing every day for the first six months of 2025, the new Hospitality Market Monitor from CGA by NIQ and AlixPartners, the global consulting firm, shows.
The research reveals a total of 98,746 sites operating at the end of June, 374 fewer than at the start of the year. It equates to 62 net closures per month, or two per day. In the context of the overall size of the market, Britain’s number of licensed premises fell by 0.4% in the first six months of 2025.
The latest hospitality closures mean the sector is now 14.2% smaller (net) than it was at the start of the COVID-19 pandemic in March 2020, having recorded more than 16,000 net closures in the ensuing five-year period.
The new numbers are a setback for hospitality after a solid 2024, when site numbers were largely stable. The closures have followed the introduction of significant new employment costs in April, which have placed new pressures on site profitability. In absence of mitigation, these costs may trigger a new wave of company restructurings in the second half of this year.
The report shows how restaurants and smaller businesses have borne the brunt of closures so far in 2025. The food-led sector has contracted by 2.9% in just one year, in contrast to a 1.0% increase in drink-led venues. The difference in fortunes is also reflected in the CGA RSM Hospitality Business Tracker, which shows managed pubs have outperformed all other sub segments for sales in each month of this year.
The Hospitality Market Monitor from CGA by NIQ and AlixPartners reveals more trends in openings and closures across the hospitality sector, including a spotlight on the relatively resilient Manchester market. Of the 10 British city centres with the most licensed premises, Manchester is the only one to have a recorded an increase in venues between March and June, with recent openings there featuring expanding London-based brands, as well as local operators and entrepreneurs.
Karl Chessell, business unit director – hospitality operators and food, EMEA at CGA by NIQ, said: “Hospitality has been struggling under a disproportionate weight of inflation and taxes in recent years, and our latest figures show how every round of additional costs sends more businesses to the wall. New pay and National Insurance contributions aren’t the sole cause of closures lately, but they have been the final straw for many operators—especially smaller ones. The sector needs a fairer tax regime that supports growth and investment and encourages consumer spending. This environment will help the sector flourish and ensure more stability in venue numbers as we move forward.”
Graeme Smith, a senior partner at AlixPartners, said: “After a period of relative stability for pub and restaurant businesses last year, the first half of 2025 has proved more challenging, with the net closure rate increasing again – the big question for hospitality is what happens from here.
“The effects of a step change in costs and taxation, which landed this April, have made the trading environment more challenging for many hospitality businesses. Consumer demand appears to be resilient, so the medium-term impact of these changes is yet to be seen, although it seems likely that more closures will follow in the immediate term. In this environment, we would expect the polarisation in the market to continue, with the leading players continuing to grow and take market share from struggling brands.”
Recent Posts
- Hospitality shrinks in first half of 2025 as new pay and NICs branded “final straw” for many
- Bidfresh acquires Hodgson Fish and Sailbrand
- Boost burger sales with Kerrymaid’s cheesy duo
- London’s latest chip shop where nothing is edible
- Rising costs and climate pressures push UK foodservice inflation higher
