Statistics from NIQ and AlixPartners’ Hospitality Market Monitor show that venue numbers across the UK fell at a rate of two premises per day in the first half of 2025.
Leading pizza chain Pizza Hut announced earlier this month it had entered Administration, closing 68 restaurants nationwide. Is this what the future holds for restaurants around the country?
Our Business Recovery and Restructuring team explore the hospitality landscape during 2025, so far, and the trends which could continue into 2026.
Statistics
Research has shown that 98,746 sites were operating at the end of June 2025, 374 less than at the start of the year. This equates to 62 net closures per month, or two per day, and the overall number of licensed premises fell by 0.4% across Britian during the first half of the year.
The latest hospitality closures result in the sector, as a whole, now being 14.2% smaller than it was at the start of the Covid-19 pandemic in March 2020, having recorded more than 16,000 net closures in the ensuing five-year period.
Independent and family run establishments were, and continue to be, the most affected over the past five years. The independent restaurant sector is now 22.7% smaller than it was before the pandemic, and, alongside casual dining, has suffered 5,801 net closures since March 2020, which equates to 21 per week.
Key contributing factors
The increase of closures in the hospitality sector is a reflection of the additional cost pressures introduced by the Government over the past year. A rise in National Insurance Contributions (NIC) and National Minimum Wage (NMW) has created challenging market operating conditions and placed new pressures on site profitability. Higher rent and rates and a continuous rise in food prices add to the strain on business margins, with customers disposable income also coming under increasing pressure.
Big establishments are being affected
While all food-led segments of the market have been negatively affected, recent losses have been greatest in restaurants, including those that are bigger and more labour intensive.
A recent example is the popular chain Pizza Hut, which announced its closure of 68 sites across the country. DC London Pie, the company running Pizza Hut UK’s restaurants under a franchise deal, appointed Administrators to oversee the restructuring on 20th October 2025.
US company Yum! Brands has since bought the UK restaurant operation in a pre-pack Administration deal, saving 64 sites and securing 1,276 jobs. Yum! Brands own the global Pizza Hut business, as well as KFC and Taco Bell, and will directly own the remaining locations.
Owner-managed businesses continue to struggle
For owner-managed businesses (OMBs), rising energy bills, supplier costs and rent can be a critical threat, with many companies having to raise prices and risk losing their customers. Since Covid 19, OMBs have been faced with less investment and less hiring and in turn less opportunities for innovation, leaving owner-managers working longer hours and taking on more roles, resulting in burnout and in some cases, abandoning the business.
My business is facing similar challenges – what should I do?
With the Autumn Budget on the horizon, businesses in the hospitality sector could be faced with further strains on finances. If you or your business is feeling the impact of market conditions, it is important to seek advice as early as possible. Our Business Recovery and Restructuring team can assist in navigating any challenges and preparing your business for a secure future and can offer an initial meeting free of charge to discuss the best options available to you.
Get in touch today to see how we can help.
