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Hospitality industry shrinks in first half of 2025 as cost pressures bite

8th Aug 2025 - 05:00
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Hospitality industry shrinks in first half of 2025 as cost pressures bite
Abstract
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 according to the new Hospitality Market Monitor from CGA by NIQ and AlixPartners.

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.

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.”

Written by
Edward Waddell