UK hospitality closures slowing down amid easing of inflationary pressures

The rate of hospitality business closures slowed down over the first months of 2024 as businesses saw some rampant cost inflation ease back.

Despite this, industry data reveals that one in every 40 pubs, restaurants, bars, and hotels still permanently closed within the last year. The first quarter of this year saw 368 hospitality venues, an average of four each day, shut their doors for good, according to new stats from CGA by NIQ and AlixPartners.

The data meant that there were 98,745 hospitality firms across the UK at the end of March, dropping by more than 2,000 since the same time a year earlier. However, these figures suggest a slowing drop rate amid a cushioning effect on inflation for business runners and consumers alike.

Simultaneously, it showed an increase in public demand for dining out, recording a 0.1% jump in food-led venue numbers over the three-month period. Meanwhile, beverage-led premises and accommodation businesses experienced respective decreases of 0.7% and 0.4%.

Reflecting on the data, Karl Chessell, a director at CGA by NIQ, said: "After a very challenging few years, these numbers give grounds for tentative optimism that hospitality closures will slow as 2024 goes on. While thousands of businesses remain fragile, a downward trend in inflation should hopefully raise the confidence of operators, consumers and investors alike, and protect more venues from closing the doors."

"It is particularly encouraging to see a marginal return to new openings for both casual dining and independent restaurants, though sustained growth is likely to be some way off."

Graeme Smith, AlixPartners' managing director, and head of leisure, corporate finance, said: "While the number of venues continues to tick down overall, the rate has slowed significantly, and hopefully this a further sign of the easing of some of these big market pressures. Operating conditions are clearly not easy, but the volatility of recent years has calmed."