Hospitality lost two sites per day in first half of 2025 as employment cost pressures bite: Additional cost pressures from government policy around national insurance contributions and taxation, combined with tough market conditions, saw venue numbers fall in the first half of the year, with two premises closing every day for the first six months of 2025, the new Hospitality Market Monitor from CGA by NIQ and AlixPartners shows. The research reveals a total of 98,746 sites operating at the end of June – 374 fewer than at the start of the year. It equates to 62 net closures per month, or two per day. In the context of the overall size of the market, Britain’s number of licensed premises fell by 0.4% in the first six months of 2025. The latest closures mean the sector is now 14.2% smaller (net) than it was at the start of the covid-19 pandemic, having recorded more than 16,000 net closures in the ensuing five-year period. The new numbers are a setback for hospitality after a solid 2024, when site numbers were largely stable. The closures followed the introduction of significant new employment costs in April, which have placed new pressures on site profitability. In absence of mitigation, these costs may trigger a new wave of company restructurings in the second half of this year, the report said. It shows how restaurants and smaller businesses have borne the brunt of closures so far in 2025. The food-led sector has contracted by 2.9% in just one year, in contrast to a 1.0% increase in drink-led venues. The difference in fortunes is also reflected in the CGA RSM Hospitality Business Tracker, which shows managed pubs have outperformed all other sub segments for sales in each month of this year. The Hospitality Market Monitor reveals more trends in openings and closures across the hospitality sector, including a spotlight on the relatively resilient Manchester market. Of the ten British city centres with the most licensed premises, Manchester is the only one to have a recorded an increase in venues between March and June, with recent openings there featuring expanding London-based brands, as well as local operators and entrepreneurs. Kate Nicholls, chair of UKHospitality, said: “These latest figures are a devastating blow. Two hospitality venues closing every day is not just a statistic; it represents the hollowing out of our high streets and communities. The result is a sector in survival mode, where investment is at a standstill. Businesses are being forced to focus on just keeping the lights on, and growth is secondary. This cannot continue.” Karl Chessell, business unit director – hospitality operators and food, EMEA at CGA by NIQ, said: “New pay and national insurance contributions aren’t the sole cause of closures lately, but they have been the final straw for many operators, especially smaller ones. The sector needs a fairer tax regime that supports growth and investment and encourages consumer spending.” Graeme Smith, a senior partner at AlixPartners, added: “Consumer demand appears to be resilient, so the medium-term impact of these changes is yet to be seen, although it seems likely that more closures will follow in the immediate term. In this environment, we would expect the polarisation in the market to continue, with the leading players continuing to grow and take market share from struggling brands.”