Pubs and restaurants close at three a day as tax costs bite

Britain’s pubs and restaurants were still shedding sites at a rate of about three a day in early 2026, a pace that is turning tax pain into immediate job and trading cuts across the sector. NIQ’s latest Hospitality Market Monitor said the country had 98,609 licensed hospitality outlets at the end of March 2026, down 305 from December, as operators struggled with rising labour, energy, and food and drink costs.

The figures point to a second straight quarter of decline, after what NIQ described as another net contraction in the number of licensed premises. The monitor said the first quarter of 2026 saw an average of 3.4 net closures per day, a warning sign for line cooks, servers, bartenders and managers already working in a sector known for thin margins and high turnover.

Hospitality businesses say the pressure sharpened after Rachel Reeves’ first Budget on 30 October 2024, when employer National Insurance contributions rose and the National Living Wage increased. Industry bodies have warned that those changes are feeding through into job losses, shorter trading hours, reduced hiring and menu price rises, the kind of decisions that usually show up first on rota sheets and in quieter dining rooms.

Kate Nicholls, the chair of UKHospitality, said earlier sector data showed 62 net closures a month, or two a day, since the start of the year. She said hospitality was now 14.2% smaller than it was in March 2020, and that there were 22.7% fewer independent restaurants than before the pandemic. She called the figures a “devastating blow”.

The damage is not confined to one quarter. NIQ and industry data reported 382 net closures in the final three months of 2025, described as four a day, after a brief recovery earlier in the year. Another analysis said more than 1,100 pubs and restaurants had closed since Reeves’s Budget, underlining how quickly the cost squeeze has moved from balance sheets to shuttered doors.

UKHospitality has now warned that without a hospitality-wide business rates solution, it expects 2,076 closures in 2026, including 963 restaurants, 574 hotels and 540 pubs. For workers, that means fewer sites to transfer to, less stable hours and more pressure on the places that survive to stretch each shift further. For customers, it means higher bills and a shrinking choice of places to eat and drink.