Hospitality closures rise sharply in 2025 as new cost pressures bite

The number of operating hospitality premises across Britain has remained stable in the last 12 months, despite new costs threatening the viability of some businesses.

According to the Hospitality Market Monitor from CGA by NIQ and AlixPartners there was a marginal growth in the number of pubs, restaurants and hotels in the last 12 months.

As of March 2025, some 98,866 sites were operating, which is 0.1% more than 12 months prior. 

However, the figures took a dive between January and March 2025, when the total number fell 0.3% - the equivalent of 20 closures a week.

Food-led licences premises showed the largest fall in numbers, shrinking 1.1%, while the ‘themed bars’ segment of CGA’s outlet data, which includes competitive socialising venues, showed 24.3% growth in the last 12 months. It is now nearly treble the size it was at March 2020.

Karl Chessell, CGA by NIQ’s director - hospitality operators and food, EMEA, said that the contraction of hospitality venues in the first quarter of 2025 signalled a challenging year for the sector.

He added: “Most concerning of all is the wave of new costs that are faced by businesses from April. There are encouraging pockets of vibrancy, and we can be optimistic that spending may pick up later in the year, but it is likely to be a difficult second quarter for businesses that have already been weakened by sustained high inflation.”

Graeme Smith, a senior partner at AlixPartners, said: “The Budget has lifted the cost base materially for the sector and operators are consequently working through every line of the P&L, reviewing operating models and trading estates – and inevitably headcounts, too, as these tax changes filter through. Tariffs have only heightened the need for this review process, having recently led to further volatility and having impacted the alcohol industry’s cost base.”

UKHospitality chief executive Kate Nicholls added: “The loss of 20 venues a week so far this year shows the real-life impact of the increasing cost burden on hospitality. These are livelihoods, jobs and cherished community venues that have been lost for good, and that is hugely damaging to our economy, society, culture and wellbeing.

“Throughout last year, there had been some much-needed stabilisation and growth in the market, after several years of significant losses after the pandemic. The £3.4b in costs hitting the sector has clearly sent that trend into reverse.”