Two hospitality sites shut per day in first half of 2025
The hospitality sector has seen 16,000 net closures since the start of the pandemic, with BrewDog and Simmons among those to recently axe sites. For many, heavy taxation, introduced in Rachel Reeves’ Budget, was ‘the final straw’.
Two premises closed down every day for the first six months of 2025, new data has revealed.
The Hospitality Market Monitor from CGA by NIQ and AlixPartners revealed a total of 98,746 sites were operating at the end of June – 374 fewer than at the start of the year, ranking at 62 closures per month.
Overall, the number of Britain’s licensed premises fell by 0.4% in the first six months of 2025, meaning the sector has shrunk by 14.2% since the start of the pandemic in March 2020.
Karl Chessell, CGA by NIQ director of hospitality operators and food, EMEA, 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.”
Heavy taxation ‘the final straw’
He continued: “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.”
The data marks a setback for hospitality from 2024, when site numbers were largely stable. The closures come after the introduction of significant employment costs in April, piling pressure on the hospitality sector.
Manchester’s moving up
Cocktail bar chain Simmons and Scottish-based brewer BrewDog have both announced bar closures in recent weeks, with Oakman Inns also filing for administration.
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The CGA report revealed that the food-led sector contracted by 2.9% in one year, versus a 1% increase in drink-led venues.
CGA’s RSM Hospitality Business Tracker also showed managed pubs have outperformed all other sub segments for sales in each month of this year.
Of the ten British city centres with the most licensed premises, Manchester is the only one to have recorded an increase in venues between March and June, with recent openings including an expansion of London-based brands, as well as local operators and entrepreneurs.
‘Challenging’ year
Graeme Smith, a senior partner at AlixPartners, said that after a period of relative stability for pub and restaurant businesses last year, the first half of 2025 has proved challenging.
The big question, for Smith, is what happens from here.
He continued: “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.”
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