Hospitality warned of 3,000 closures in 2025

Nearly 750 hospitality venues closed between October and December last year, an average of just over eight closures a day, according to recent research.

 

The latest Hospitality Market Monitor from CGA by NIQ and global consulting firm AlixPartners, which tracks data from Britain’s licensed hospitality sector, revealed site numbers contracted by 0.7% during the three-month period as a result of mounting cost pressures.

 

It also warned of a net loss of nearly 3,000 venues over the course of 2025, should this trend continue.

 

The report showed a total of 99,120 hospitality outlets were operating in December 2024 compared to 99,113 in December 2023. These figures were comparatively positive, considering the licensed sector shrunk by 4.5% in 2022 and 2.9% in 2023.

 

However, the relative stability in site numbers was largely due to venues changing hands and some group-owned units switching to new trading methods, the tracker added.

 

It calculated there were 4,078 closures and 4,085 openings over 2024, indicating turnover of 11 venues a day.

 

Meanwhile, total drink-led sites have risen by 0.5%, while independently-run food sites saw a 1% boost in growth over the past year.

 

Karl Chessell, director of CGA by NIQ, hospitality operators and food, EMEA, said: “Given all the challenges that were thrown at hospitality in 2024, stability in site numbers shows the impressive resilience of operators. However, we continue to see a rapid churn of sites as the sector adapts to consumers’ changing habits, while hundreds of net closures in the final quarter of the year emphasise that the burden of costs—made even heavier by the autumn Budget—is threatening hospitality’s fragile renewal.

 

“The long-term confidence of leaders, entrepreneurs and investors is solid, but January has already brought further closures of venues that clung on through Christmas. With economic uncertainty lingering, many more hospitality venues remain extremely vulnerable.”

 

Graeme Smith, managing director at AlixPartners, added: “While we expect the consumer outlook to improve and mergers and acquisitions to build as we move further through the year, a significant number of businesses will remain vulnerable. The turnover of sites will continue too, we expect, as operators increasingly focus on core operations, close ancillary sites and reassess opening pipelines. Restructurings and rescue deals will be an inevitable and necessary feature of this stage in the business cycle.”

 

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