Fourth-quarter performance was slightly stronger on the drink-led side of hospitality, where numbers slipped only 0.1% – however, bars recorded quarter-on-quarter growth of 1.0%, which NIQ’s Hospitality Market Monitor stated is “a sign operators here have been slightly better protected from cost pressures and many consumers have been choosing to drink out rather than eat out in recent months”.
Britain’s number of licensed premises fell by 0.4% in the last three months of 2025, the latest monitor revealed.
Great Britain had 98,914 on-trade sites at the end of December – 382 fewer than in September and equivalent to more than four net closures per day during the fourth quarter.
Abrupt end
It represents an abrupt end to a resilient year for hospitality, after site numbers rose by 0.2% in the first nine months of 2025. The reversal in fortunes follows relentless inflation for businesses in key cost areas, alongside fragile consumer confidence about spending.
The Hospitality Market Monitor shows fourth-quarter losses were especially high in the casual dining and restaurant segments, which recorded net declines of 1.8% and 1.0% respectively. In these two channels combined, there were 241 net closures in just three months, which is almost 19 per week. Across all food-led businesses, sites fell by 0.8% between September and December.
Other findings in the monitor included there has been a steady return to growth in London, where site numbers rose by 0.6% during the course of 2025. The capital is still 14.0% short of the pre-Covid benchmark of March 2020 but hospitality there has been boosted by the steady return of office workers to their desks after sustained periods of working from home, as well as an uptick in visitors from overseas.
Relentless increases
NIQ director – hospitality operators and food EMEA – Karl Chessell said: “An acceleration in 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 because it came during hospitality’s most important trading period of the year, when businesses usually build the cash reserves to get through the quieter start to the new year.
“Despite the Government’s recent rethink on rates for pubs, conditions are unlikely to get any easier in 2026, and business confidence and sales growth both remain weak.
“Some hospitality groups and entrepreneurs continue to open sites but without more support and an upswing in people’s spending, we are likely to see hundreds more permanent closures in the months ahead.”
