Pubs & Restaurants Show Resilience Amid Challenging Economic Landscape
Specialist business property adviser, Christie & Co, has today launched its annual Business Outlook report, ‘Business Outlook 2026’, which reflects on key market activity, trends and challenges of 2025 and forecasts what 2026 might bring across the industries in which Christie & Co operates, including the pub and restaurant sectors.
Both sectors faced significant headwinds in 2025, driven by rising labour costs, higher business rates, and persistent inflation. For pubs, headline turnover remained positive for many operators, buoyed by a strong summer season, but profitability was under pressure, with as many as a third of pubs reporting difficulty converting turnover into profit. Operators responded by reducing trading hours, with early-week closures becoming more common.
In the restaurant sector, the UK’s Top 100 groups recorded double-digit growth in annual sales and profit up to mid-year, following two years of cost-cutting and site rationalisation. However, optimism was dented by the Autumn Budget, which introduced further payroll and rates pressures. Independent operators, representing around 80% of the market, faced greater challenges from food inflation and limited access to investment, however they continued to attract loyal customers through local sourcing and niche menus.
Despite these challenges, demand for quality pub and restaurant assets remains strong. In the pub sector, 91% of freehold pubs sold by Christie & Co in 2025 were for continued use, and less than 2% of sales were distressed. Private buyers accounted for 57% of transactions, highlighting confidence at the individual investor level.
In the restaurant sector, franchising continues to attract hospitality entrepreneurs seeking certainty, while drive-thru and takeaway sites remain in high demand despite rising rents. Despite Christie & Co’s sentiment survey showing that 62% of stakeholders feel negatively about the sector, only around one in five are looking to sell in 2026, showing a determination among operators to succeed.
In 2026, Christie & Co expects the market to remain polarised. Well-invested pubs and restaurants with strong offerings will remain resilient, while those unable to adapt may struggle. Consolidation is likely to accelerate, with larger operators churning estates and reinvesting proceeds to strengthen their competitive position. Technology adoption will continue to drive efficiency and enhance customer experience, while sustainability and ethical values are expected to influence consumer choices more strongly.
Looking to the year ahead, the report outlines Christie & Co’s market predictions:
- Increased M&A activity as operators seek consolidation and cost efficiencies
- Continued polarisation, with activity concentrated at the top and bottom ends of the market
- Technology-driven efficiencies and personalised offers becoming critical for restaurants
- Franchising growth as entrepreneurs diversify across multiple brands to mitigate risk
- Lower interest rates potentially tempting buyers back into the market
Stephen Owens, Managing Director – Pubs & Restaurants at Christie & Co, commented,
“2025 was a challenging year for hospitality, but resilience and adaptability have been evident across both pubs and restaurants. Operators who invest in their offering, embrace technology, and respond to evolving consumer expectations will be best placed to thrive in 2026. Despite cost pressures, demand among buyers looking to acquire hospitality venues remains strong and we anticipate renewed momentum as financing conditions start to improve.”