Hospitality business closures accelerate across the UK

Britain is losing 3.4 pubs and restaurants per day, with more than 350 closures in the first quarter alone. Rising energy costs, higher taxes and weaker consumer demand are placing sustained pressure on the sector, with further closures expected throughout 2026.

Soaring costs for businesses and consumers led to a 0.3% drop in Britain’s number of licensed premises in the first quarter of 2026, the latest Hospitality Market Monitor reveals.

The report from NIQ, powered by CGA intelligence, shows there were 98,609 outlets at the end of March 2026—305 fewer than in December 2025, and an average of 3.4 net closures per day. It is a second successive quarter-on-quarter drop and suggests that the momentum of closures in hospitality is starting to build.

The latest business failures follow relentless inflation in essential areas for hospitality, including labour, energy and food and drink, alongside fragile consumer confidence about spending. Ongoing conflicts in the Middle East are likely to trigger further price rises in energy-reliant areas in the short to medium term.

The research suggests none of hospitality’s main channels was able to record growth in the first quarter. The casual dining restaurant sector has had a particularly difficult start to 2026, with outlet numbers falling by 0.9% in three months. Bars have also been particularly affected by consumers’ cuts in discretionary spending.

The latest edition of NIQ’s Hospitality Market Monitor also provides expert analysis of Britain’s accommodation sector, which has shown above-average resilience in recent years. Outlet numbers in the licensed hotel segment have grown year-on-year and are only 4.7% smaller than it was at the pre-COVID benchmark of March 2020, compared to a 14.3% drop in all outlets. With some household budgets for holidays running low, and more increases in travel costs expected, hotels, guest houses and holiday parks may be poised to benefit from an increase in staycations over the summer.

Karl Chessell, Director – Hospitality Operators and Food, EMEA at CGA by NIQ, said “Soaring costs have taken a heavy toll on hospitality in the first quarter and forced hundreds of businesses to close, with distressing impacts for the operators and employees concerned. Confidence among leaders and consumers alike is low, and geopolitical crises are likely to cause more damage in the months ahead. Many pubs, bars, restaurants and other outlets have shown remarkable resilience in the face of unprecedented challenges, but thousands are now nearing breaking point. Without targeted support, more closures can be expected over the rest of 2026.”