Hospitality sector has shrunk by 14.2% since March 2020, CGA finds

The hospitality sector is 14.2% smaller in August 2025 than it was in March 2020 before the first covid lockdown, according to data from CGA and Alix Partners.

It comes as the sector has seen 62 net closures per month, or two a day since the beginning of the year. Since the start of the pandemic, hospitality has seen 16,000 net closures.

Food-led venues have suffered more than drink-led ones, contracting nearly 3% in a year, particularly independents and casual dining restaurants. However, wet-led venues have shown resilience and even recorded 1% growth.

The data also found that there are now 22.7% fewer independent restaurants now, then there was pre-pandemic

It is believed that the likely impact of these numbers will be a round of company restructurings in the second half of the year.

In response to the findings Kate Nicholls, chair of UKHospitality, said: “These latest figures are a devastating blow, showing in the starkest terms the impact of Government-driven cost pressures. Two hospitality venues closing every day is not just a statistic; it represents the hollowing out of our high streets and communities.

“Independent businesses, the lifeblood of our sector, are being disproportionately crushed under the weight of unfair taxation and soaring employment costs. The result is a sector in survival mode, where investment is at a standstill. Businesses are being forced to focus on just keeping the lights on, and growth is secondary.”

She added: “This cannot continue. The Government has pushed hospitality to the breaking point, and we now run the very real risk of being taxed out of existence. Ahead of the Budget, we are calling for urgent, decisive action to relieve the burden on a sector that should be a powerful engine for economic growth and job creation across the entire country.

“The Government must lower the business rates that punish high street businesses, fix the poorly designed National Insurance Contributions that penalise job creation, and cut the rate of VAT to stimulate investment and align us with our European counterparts. Without these changes, we will see this alarming trend of closures accelerate, costing thousands more jobs and decimating high streets across the UK.”