Key insights of the SLTA’s Scottish On-Trade Market Insight Survey Report (August 2025):
- 75% of outlets saw reduced profitability, 56% are reporting declines of more than 10%.
- 59% expect to be loss-making in 2025 while 14% are planning or considering closure - up from 6% in January.
- 70% of venues are in decline or facing closure.
- Key challenges include rising costs, particularly employers’ national insurance contributions, commercial rates and low footfall.
- 67% reported cost hikes of more than 10% while almost 90% expect the Scottish economy to decline.
- Staffing issues are ongoing with almost a third of operators cutting staff or hours as a result of national insurance contribution increases.
- 94% of those surveyed said UK Government policies weren’t aligned with business growth and 98% said the same of the Scottish Government.
- Ahead of the 2026 Scottish elections, three quarters (75%) of those polled want rates aligned with England and VAT reductions.
- The SLTA called for urgent Government support to help protect Scotland’s licensed hospitality sector.
The SLTA described the results as “brutal”, saying it paints a worrying picture for Scotland’s pubs, bars and hospitality venues.
The Scottish On-Trade Market Insight Survey Report (August 2025) saw 350 pubs, bars, restaurants and hotels, covering the full spectrum of licensed hospitality businesses, contribute to the survey.
It revealed 59% of venues expect to make a loss in 2025 and that profitability in 75% of outlets was down compared with the same time last year.
More than half (56%) reported a decline of over 10%, and 14% of outlets are either closing or seriously considering closure. In the SLTA’s January survey report, this figure was 6% – it has now more than doubled.
In addition, for over 50% of outlets surveyed, trading was down in comparison with last year although 26% said trading was on a par with 2024.
Challenges
The SLTA said the snapshot survey showed the challenges facing Scotland’s pubs, bars and hospitality venues after the recent changes to employers’ national insurance contributions as well as ongoing rising costs for businesses and a gloomy economic outlook.
“We’ve spoken repeatedly about the many challenges Scotland’s licensed hospitality sector continues to face. In recent years, it navigated the stormy waters of Brexit, the Covid pandemic, rising utility bills, and the ongoing cost-of-living pressures that have impacted on businesses’ operating costs and consumer spending,” said Colin Wilkinson, SLTA managing director.
“However, in the 10 years we have been conducting our market insight surveys, these findings are the most negative we have seen – these insights are extremely concerning and the only word to describe the current trading conditions is ‘brutal’. There has never been so much business uncertainty.”
He added the spiralling costs to businesses from the Chancellor’s hike in employers’ NICs in the autumn Budget, which took effect in April alongside increases in the national living and minimum wage, are having a “devastating impact” on Scotland’s pubs, bars, hotels and hospitality venues.
Reduced footfall
“Businesses are reporting lower income as a result of current low consumer confidence and reduced footfall – and, of course, we continue to call on the Scottish and UK governments to work to support one of our key industries. The most effective way to achieve this is by reducing VAT in the licensed hospitality sector and an urgent review of the commercial rating system in Scotland,” he added.
The SLTA called for the Scottish Government to accept that hospitality is one of Scotland’s key industries and that it plays a crucial role in tourism, economic prosperity and employment.
The survey also revealed that well over 90% do not think the Scottish Governments policies are aligned to growing their businesses. It also found that nearly 90% of respondents expect the Scottish economy to decline in 2025.
In 2026’s Scottish Parliament election, 75% of outlets want the next Scottish Government to address rates discrepancies with the rest of the UK.
“Ahead of the Holyrood election in 2026, we asked respondents what is the biggest single thing that they would like all parties to include in their manifestos, and rates reform, to bring Scotland at least into alignment with the rest of the UK was the biggest issue, with notable mentions for hospitality work visas and promoting the hospitality sector,” he added.
The SLTA’s market insights survey is based upon quantitative research from outlets covering the length and breadth of the country and is supported by major food and drink chains and independent pubs, bars and hotels in Scotland’s licensed hospitality sector.
