‘There’s growing anger’: Britain’s late-night economy shrinks 28% since 2020
Britain’s late-night economy has shrunk by 28% since March 2020, new industry data shows, amid warnings that nightclubs are being pushed to the brink by rising costs and shifting consumer habits. NTIA CEO Michael Kill says there’s a “growing anger” among operators, who feel “systematically squeezed”. He tells db, “I can only see it getting worse before it gets better.”
The Night Time Industries Association (NTIA) previously warned nightclubs could go extinct by 2029.
And recent data from the Night Time Economy Market Monitor, published by the trade body and CGA by NIQ, has revealed that pressures facing nightclubs continue to mount: the late-night sector has shrunk by 4.6% in the past 12 months, and 28% since 2020.
NTIA CEO Michael Kill told the drinks business there is a sense of “nervous anticipation” among late-night operators ahead of the Budget, alongside a “clear understanding that there is going to be nothing in the Budget for hospitality.”
‘Growing anger’
He said this is coupled with a “growing frustration and anger” that is likely to surface once the Chancellor delivers his statement. Kill added that operators are increasingly worried by suggestions the government may be considering tax rises that could further affect the late-night sector.
“We can’t tax our way into growth,” he made clear. “Confidence in the Government is dwindling. There are some real concerns about what the future looks like. Given the contraction in the late-night economy, I can only see it getting worse before it gets better.”
Industry leaders say the findings highlight the cumulative effect of years of financial strain alongside regulatory and environmental pressures, issues they argue must be addressed in the Government’s upcoming Budget on 26 November.
Kill added that government policies have suppressed a vital part of Britain’s cultural and social life “for too long”. He said that while the late-night economy is an engine for jobs, tourism and community vibrancy, it is “being systematically squeezed”.
According to Kill, rising costs, safety fears and unreliable late-night transport are creating barriers to spending and catalysing venue closures. “The Budget is a chance to reverse this trend and recognise the late-night sector as the cultural and economic powerhouse it truly is,” he said in a statement, but told db he feels this is unlikely.
Shifting habits
Data from the CGA RSM Hospitality Business Tracker also suggested that spending patterns are shifting. While drink-led pubs saw modest year-on-year sales growth of 2.5% in September, bars, which typically rely on late-night trade, recorded a 6.8% fall.
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Early-evening spending is also now outstripping traditional peak hours. The 5pm to 7pm period has overtaken 7pm to 10pm as the most lucrative trading window for hospitality venues.
The NTIA says concerns about personal safety and limited late-night public transport are contributing to the trend. A quarter of late-night visitors now factor in security when planning nights out, while 28% weigh up transport options, leaving many venues significantly quieter after midnight.
Speaking to db, Kill added: “The key message for success is be multifaceted, be versatile and adapt to the current marketplace, because it’s evolving.”
A divided sector
While the late-night economy continues to contract, the picture for the broader evening economy is more positive. The number of licensed premises operating primarily before midnight climbed by 0.9% in the year to September and is now just 7.4% below pre-pandemic levels.
Independent operators appear to be bearing the brunt of the downturn. Since March 2020, independently run late-night venues have fallen by more than 30%, compared with a 14.5% decline among larger hospitality groups that have been better able to shoulder rising rents, wages, energy bills and licensing fees.
The research also suggests that the pace of decline varies across the UK. Bars have fared better than nightclubs, while northern cities and Scotland have managed to retain a larger share of their pre-Covid venues than London.
Looking ahead
Reuben Pullan, CGA by NIQ’s senior insight consultant, said the figures were proof of the pressures facing late-night businesses. “While many have responded well to seismic changes and challenges, others, especially smaller operators, have found it impossible to recover from Covid and its aftershocks,” he said.
“Consumers remain eager to go out, and demand for hospitality experiences is changing rather than collapsing. Christmas and New Year trading will bring a much-needed boost, but we’re likely to see more closures into 2026 unless the late-night economy gets the support from central and local government that it deserves.”
And it’s not just late-night businesses that are suffering, but the broader hospitality sector as a whole, which is dealing with a recruitment struggles, tax burdens and high cost pressures. In the runup to the Budget 345 leading hospitality businesses have called upon the British Government for support in an open letter addressed to the Chancellor, following criticism that the last Budget was “immediate, concentrated and socially regressive”.
According to trade body UKHospitality, the last Budget left the sector “taxed out”, with businesses forced to close, more than 80,000 jobs lost in the sector, opportunities for young people reduced and prices increased for consumers. The firms, which include Greene King, Stonegate Group and Fuller’s, are calling for measures including lower business rates, changes to NICs and reduced VAT.
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