Outlook For Scotland’s Pubs, Bars And Hospitality Venues ‘Brutal’, Says SLTA

NEW figures released today by the SLTA (Scottish Licensed Trade Association) have been described as “brutal” and paint a worrying picture for Scotland’s pubs, bars and hospitality venues – with an alarming 70% of outlets in decline or considering closure, and 59% expecting to make a loss in 2025.

The Scottish On-Trade Market Insight Survey Report (August 2025) further reveals that profitability in 75% of outlets was down compared with the same time last year, with 56% of outlets reporting a decline of over 10% and 14% of outlets either closing or seriously considering closure. In the SLTA’s January survey report, this figure was 6% – it has now more than doubled.

In addition, for over 50% of outlets surveyed, trading was down in comparison with last year although 26% said trading was on a par with 2024.

The snapshot survey of the challenges facing Scotland’s pubs, bars and hospitality venues in 2025 comes after the recent changes to employers’ national insurance contributions as well as ongoing rising costs for businesses and a gloomy economic outlook.

Over 350 pubs, bars, restaurants and hotels, covering the full spectrum of licensed hospitality businesses, contributed to the survey – with the continued challenges facing the hospitality sector, driven by a challenging economic environment and visitors and customers with less disposable income, coming across loud and clear in its worrying findings.

Colin Wilkinson, SLTA managing director, commented:
“We’ve spoken repeatedly about the many challenges Scotland’s licensed hospitality sector continues to face. In recent years, it navigated the stormy waters of Brexit, the Covid pandemic, rising utility bills, and the ongoing cost-of-living pressures that have impacted on businesses’ operating costs and consumer spending.

“However, in the 10 years that we have been conducting our market insight surveys, these findings are the most negative we have seen – these insights are extremely concerning and the only word to describe the current trading conditions is ‘brutal’. There has never been so much business uncertainty.

“Spiralling costs to businesses from the Chancellor’s hike in employers’ NICs in the Autumn Budget, which took effect in April alongside increases in the national living and minimum wage, are having a devastating impact on Scotland’s pubs, bars, hotels and hospitality venues.

“Businesses are reporting lower income as a result of current low consumer confidence and reduced footfall – and, of course, we continue to call on the Scottish and UK governments to work to support one of our key industries. The most effective way to achieve this is by reducing VAT in the licensed hospitality sector and an urgent review of the commercial rating system in Scotland.”

Mr Wilkinson added:
“It is more important than ever that the Scottish Government finally accepts that hospitality is one of Scotland’s key industries and plays a crucial role in tourism, economic prosperity and employment.

“So, it comes as no surprise that respondents to our survey have voiced major concerns about the economy, and the economic policies of both the Scottish and UK governments – well over 90% do not think their policies are aligned to growing their businesses. With 59% of outlets expecting to be loss-making in 2025, the outlook is not positive.

“Ahead of the Holyrood election in 2026, we asked respondents what is the biggest single thing that they would like all parties to include in their manifestos, and rates reform, to bring Scotland at least into alignment with the rest of the UK was the biggest issue, with notable mentions for hospitality work visas and promoting the hospitality sector.

“The increase in employers’ NICs has impacted staffing and opening hours, with nearly one-third of outlets cutting staffing levels, our survey insights reveal. Add to the equation the ongoing regulatory hurdles and bureaucracy that businesses have to deal with on a daily basis and it’s no wonder that many owners are at the end of their tether.”

The SLTA’s market insights survey is based upon quantitative research from outlets covering the length and breadth of the country and is supported by major food and drink chains and independent pubs, bars and hotels in Scotland’s licensed hospitality sector.

Executive summary of key insights:

• Profitability in 75% of outlets was down in comparison with last year, with 56% of outlets reporting a decline of over 10%. 59% of outlets expecting to be loss making in 2025
• 56% of outlets expect a decline in their trading performance for 2025 and 14% of outlets are planning to or are seriously considering closure. This is over double the number of our January 2025 survey (6%)
• Nearly 90% of respondents expect the Scottish economy to decline in 2025
• Increases in employers’ national insurance contributions have impacted staffing and opening hours, with nearly a third of outlets cutting staffing levels
• Increases in national insurance and misalignment with rates across the rest of the UK are key drivers behind the decline in performance and outlook
• In 2026’s Scottish Parliament election, 75% of outlets want the next Scottish Government to address rates discrepancies with the rest of the UK