Hospitality crisis pushed thousands of firms to shut in 2025
Thousands of hospitality industries were forced to call time last year, as soaring operating costs took their toll.
The owners of 3,353 accommodation, food and drink firms entered insolvency proceedings in the twelve months to December 2025, according to the Buchler Phillips hospitality index.
These insolvencies spell out the impact of food inflation and climbing labour costs, in a year which was also dominated by a bitter row between the Treasury and the hospitality industry over business rate reforms.
While this number is slightly lower than 2024’s 3,465, the insolvency index ended the year higher (187.3) than how it started in the year’s first quarter (181.2).
Hospitality leaders are facing up to £4bn of additional costs and say they would need to hike prices by around 8 per cent to keep up, Buchler Phillips notes.
Jo Milner, managing director of restructuring firm, said: “There is no sign of hospitality budging from near the top of the insolvency table in the foreseeable future.
“As last year’s budget changes kick in fully, even last minute government measures will provide little respite for the stricken sector.”
Of the more than 3,500 hospitality firms which shuttered last year, 539 were bars or pubs, according to the London Gazette.
In November, City PM revealed that Britain’s pubs were closing at the fastest rate this century.
Jennifer Lockhart, a partner at independent law firm Brabners, said businesses across the UK’s economy are battling with insolvency.
She said: “The national minimum wage increase in April will add further strain to operating costs, particularly in already-struggling sectors like construction.
“Combined with recruitment pressures from the Employment Rights Act implementation later this year, businesses are managing multiple demands with limited headroom.”
Leon and Pizza Hut among high-profile closures
A number of high-profile hospitality operators fell into insolvency in the final quarter of last year, including fast-food chain Leon and Pizza Hut UK franchise operator DC London Pie.
Leon entered administration in December, as its new owner pledged to slash jobs and close a number of locations in a bid to save the firm.
DC London Pie collapsed late last year, causing 79 Pizza Hut sites to shut and 1,160 jobs to be lost.