Bloodbath for UK restaurants as 19 wiped out a week
The pace of hospitality closures increased in the fourth quarter of 2025, as operating cost pressures mounted, the latest Hospitality Market Monitor by NIQ shows.
The data indicates that Britain’s number of licensed premises fell by 0.4% in the last three months of the year. The 382 net closures are
equivalent to more than four per day.
The sharp drop was a disappointing end to a resilient 2025 for hospitality. In the first nine months of the year, site numbers had risen by 0.2% – an impressive performance in the context of a tough trading environment.
The abrupt reversal follows relentless inflation in key cost areas over the year, alongside fragile consumer confidence about spending. With managed groups and independent operators dropping by 0.5% and 0.2% respectively, it’s apparent that even well-resourced businesses are feeling the pinch.
Casual dining and restaurants bear the brunt
Fourth-quarter losses were especially high in the casual dining and restaurant segments, which recorded net declines of 1.8% and 1.0%. In these two channels combined, there were 241 closures in three months, or nearly 19 per week.
Restaurants have been hit hardest by extra costs – especially in food prices and labour costs following more increases in minimum pay levels and National Insurance contributions. Across all food-led
businesses, sites fell by 0.8% between September and December.
The picture is a little brighter on the drink-led side of hospitality, where numbers slipped just 0.1%. Bars and large venues were the only two segments in quarter-on-quarter growth. It suggests that operators in these channels have been slightly better insulated from cost pressures and that some consumers have been choosing to drink out rather than eat out in recent months.
“An acceleration of closures in the final quarter of 2025 shows the toll that relentless increases in operating costs are taking on hospitality. The dip is particularly concerning since it came during hospitality’s most important trading period of the year, when businesses traditionally build the cash reserves to sustain them through the quieter first quarter of the new year,” said Karl Chessell (Director – Hospitality Operators and Food, EMEA at NIQ).
Despite the government’s recent rethink on rates for pubs, conditions are unlikely to get any easier in 2026. NIQ’s research indicates low optimism among leaders and flat or negative year-on-year trading in real terms. Nevertheless, there are pockets of positivity, said Chessell.
“While the NIQ RSM Hospitality Business Tracker shows growth at managed groups’ steady sites (like-for-like venues) was flat across 2025, growth was positive in every month in the total market, including the new revenues gained by site openings,” he said.
“Market churn is very high at the moment, but without more support and an uptick in people’s spending, we are likely to see hundreds more permanent closures in the months ahead.”
