Q4 site losses erase year of hospitality growth

Business confidence remains weak despite a brief 0.2% growth spike earlier in 2025.

Hundreds more restaurants could close in 2026 if consumers continue to cut back and hospitality groups and business owners do not get more support from the government, an analyst warns.

The statement comes following an increase of 0.4% of closures in the fourth quarter of 2025, abruptly ending the 0.2% growth in the first nine months of the year, according to the latest Hospitality Market Monitor from NIQ.

Q4 ended with 98,914 sites at the end of December—382 fewer than in September and equivalent to more than 4 net closures per day over the fourth quarter.

Fourth-quarter losses were especially high in the casual dining and restaurant segments, which recorded net declines of 1.8% and 1%, respectively. In these two channels combined, there were 241 net closures in just three months, or nearly 19 per week. Across all food-led businesses, sites fell by 0.8% between September and December.

In London, however, site numbers rose 0.6% in 2025, albeit lower than 14% of the pre-COVID benchmark in March 2020. The increase in site numbers was boosted by the steady return of office workers after sustained periods of working from home, as well as an uptick in visitors from overseas.

“Despite the government’s recent rethink on rates for pubs, conditions are unlikely to get any easier in 2026, and business confidence and sales growth both remain weak,” Karl Chessell, director - hospitality operators and food, EMEA at NIQ, said.

Margins continue to be tight, with December like-for-like sales flat despite the holiday season boost. According to a separate report by RSM UK, consumers are cutting back on eating out and takeaways to save money or pay off debts.