Later sector closure data – our response

The report attributes this downturn to increased cost pressures from Government tax policies and new employment costs, which reversed the stability seen in 2024.

The key findings from the report are:

• Hospitality has seen 62 net closures per month, or two a day since the beginning of the year
• The sector is now 14.2% smaller than it was in March 2020
• Food-led venues have suffered more than drink-led ones, contracting nearly 3% in a year, particularly independents and casual dining restaurants
• Wet-led venues, conversely, have shown resilience and even recorded 1% growth
• There are now 22.7% fewer independent restaurants now, then there was pre-pandemic
• Since the start of the pandemic, hospitality has seen 16,000 net closures
• The likely impact will be a round of company restructurings in the second half of the year

Responding to the report’s findings Kate Nicholls, Chair of UKHospitality, said: “These latest figures are a devastating blow, showing in the starkest terms the impact of Government-driven cost pressures.

Two hospitality venues closing every day is not just a statistic; it represents the hollowing out of our high streets and communities. Independent businesses, the lifeblood of our sector, are being disproportionately crushed under the weight of unfair taxation and soaring employment costs. The result is a sector in survival mode, where investment is at a standstill. Businesses are being forced to focus on just keeping the lights on, and growth is secondary.

“This cannot continue. The Government has pushed hospitality to the breaking point, and we now run the very real risk of being taxed out of existence. Ahead of the Budget, we are calling for urgent, decisive action to relieve the burden on a sector that should be a powerful engine for economic growth and job creation across the entire country. The Government must lower the business rates that punish high street businesses, fix the poorly designed National Insurance Contributions that penalise job creation, and cut the rate of VAT to stimulate investment and align us with our European counterparts. Without these changes, we will see this alarming trend of closures accelerate, costing thousands more jobs and decimating high streets across the UK.”