The UK hospitality industry experienced a turbulent final quarter of 2024, with an average of more than eight venues shutting their doors each day, according to the latest Hospitality Market Monitor from CGA by NIQ and AlixPartners.
The report reveals that nearly 750 hospitality venues ceased trading between October and December, underscoring the mounting financial pressures within the sector.
Despite this concerning trend, the total number of hospitality outlets in operation at the end of 2024 stood at 99,120, showing a marginal increase compared to 99,113 in December 2023. However, industry analysts caution that this apparent stability is largely due to ownership changes and strategic shifts in trading models rather than genuine growth.
The report also highlights the ongoing volatility within the sector, with 4,078 closures and 4,085 openings recorded throughout 2024—an average turnover rate of 11 venues per day. Independent food-led establishments showed modest growth of 1%, while drink-led venues expanded by 0.5%, indicating some resilience in niche markets.
However, the overall outlook remains challenging, with predictions suggesting that if the current rate of closures persists, the UK could witness a net loss of nearly 3,000 hospitality businesses by the end of 2025. Industry leaders have voiced their concerns, warning that rising costs, economic uncertainty, and policy decisions—including tax burdens introduced in the autumn Budget—are placing further strain on operators.
Karl Chessell, Director of Hospitality Operators and Food at CGA by NIQ, commented: “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. The hundreds of net closures in the final quarter of the year highlight how the burden of costs is threatening hospitality’s fragile renewal.”
AlixPartners’ managing director Graeme Smith said: “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 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.”
“In the face of this disruption, it is vital that businesses define the key actions they need to be taking – and where they need to be taking them – in order to mitigate the additional costs facing the industry.”