Insolvencies in the sector fell 20% to 271 in February 2025, compared to the same month last year (339) yet they remain historically higher than pre-pandemic levels.
Audit, tax and consulting firm RSM UK’s partner and head of leisure and hospitality Saxon Moseley said: “It’s encouraging to see hospitality insolvencies down on last year but they remain historically high when compared to pre-pandemic levels, suggesting this elevated level of insolvencies is the new normal for the industry.
“In recent years, we’ve seen less viable businesses in the hospitality sector either exit the market or undergo restructuring, meaning only the more resilient operators are left.
Less viable brands closing
“While the industry is still losing a large number of businesses each month, naturally, these numbers should start to fall as less viable brands close up shop.
“Operators are facing significant economic and geopolitical uncertainty, which is weighing heavily on consumer confidence.
“This, combined with April’s rise in employment costs, means it could be a challenging few months to come.
“Hospitality trade continues to be particularly weak, as consumers are opting to increase spending on retail rather than dining out.
“However, with the warmer weather making an appearance and real wages continuing to climb, it’s hoped the sector can enjoy a strong summer of trading to see it through the various headwinds.”
Remained resilient
As reported by The Morning Advertiser, the Hospitality Market Monitor from CGA by NIQ and AlixPartners has shown community, food and high street pub numbers have remained resilient over the past quarter.
Between December 2024 and March 2025, venue numbers rose by 0.3%, 0.1% and 0.2% respectively with the data revealing there were 17,990 community pubs, 11,279 food pubs and 6,139 high street pubs in March 2025.
The report also highlighted growth areas of hospitality despite ongoing challenges, such as expansion of bars powered by competitive socialising concepts.
There are now 2.8% more bars than at March 2020, which makes it the only segment to have grown in size since the start of the Covid-19 pandemic.
