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New openings in the UK outpace closures

After two years of contraction, Britain’s hospitality sector has shown remarkable resilience, with the number of licensed premises at the end of 2024 virtually unchanged from a year earlier. 

The latest Hospitality Market Monitor from CGA by NIQ and AlixPartners reports 99,120 sites operating in December, a marginal increase from the 99,113 recorded at the end of 2023. Yet, beneath the stability, churn remains high and cost pressures continue to squeeze the industry, particularly as closures accelerated in the crucial final quarter of the year.

Throughout 2024, 4,078 venues shuttered their doors while 4,085 new ones opened, an impressive turnover equivalent to 11 sites changing hands each day. However, the final quarter saw a net decline of 748 sites — an average of over eight closures per day. If this pace of closure were to persist, it would equate to an annual net loss of nearly 3,000 sites. 

While the overall market has held steady, notable trends have emerged. Drink-led venues, particularly pubs, bars, and social clubs, have fared slightly better, increasing by 0.5% year-on-year. In contrast, food-led venues have contracted by 0.7%, with multi-site operators particularly hard hit, experiencing a 3.2% decline. Independently run food-led venues, on the other hand, demonstrated resilience with a 1% increase, suggesting that smaller operators may be better positioned to adapt to evolving market conditions.

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Karl Chessell, CGA by NIQ’s director of 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.”

Autumn Budget impact

Graeme Smith, AlixPartners’ MD, echoed these concerns: “The sector has learnt how to operate in tough times over the course of the past few years, and there is a sense that this ability will be tested again this year, becoming more important than ever. The changes to the national minimum wage, national insurance and business rates will render many marginal sites unviable and cause businesses to look at how to right-size their operations for this new environment.”

While optimism remains that consumer confidence may improve later in 2025, the pressure on operators is unlikely to ease in the near term. Smith added: “While we expect the consumer outlook to improve and M&A 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.”

The conclusion is clear: while 2024 was a year of stabilisation, the challenges facing Britain’s hospitality sector remain acute. With further cost increases looming and a new phase of restructuring underway, operators must be prepared for another year of adaptation and resilience. The industry has weathered storms before, but whether it can navigate the fresh headwinds of 2025 remains an open question.

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