Night-time economy shrinks by 28% as closures accelerate

Britain has lost more than a quarter of its late-night economy and 75,000 jobs, according to the latest Night Time Industries Association (NTIA) market monitor.

Data produced with NIQ shows late-night venues fell by 4.1% in 2025. The sector is now 28.2% smaller than before the pandemic, with nightclubs declining by 35%.

The night-time economy generates £160bn annually and supports two million jobs. However, real-terms spending remains 10% below 2019 levels while productivity growth has stalled at 1.5%.

Growth in 2025 was driven by price inflation rather than demand. Food and drink volumes fell by 6% as businesses absorbed rising labour, energy, and compliance costs.

The report highlighted a divide between the wider evening economy, which grew by 0.9%, and the late-night sector. Traditional venues face challenges from unreliable transport and safety concerns.

London outperformed national trends with 2.7% growth in late-night venues. The NTIA suggested that this provides evidence that targeted investment in transport and public safety can prevent decline.

The NTIA is also calling for an emergency support package. Proposals include a VAT reduction for hospitality, business rates reform, and the appointment of a dedicated government minister.

Andy Burnham, Greater Manchester mayor, said: “I would argue for a VAT rate more consistent with what you find in Europe because of the social value that your businesses bring to places and towns that need that life injected into them. I personally would permanently support a lower business rates regime for hospitality businesses for exactly the same reason.”

Angela Rayner, deputy prime minister, added: “The night-time economy is not a side show. It is a cornerstone of who we are as a country. This isn’t about special treatment. It’s about creating a shared tax burden and an equitable environment.”

Michael Kill, NTIA chief executive, concluded: “This is what happens when a £160bn sector is loaded with rising costs and then left to absorb shock after shock without support. Losing over 28% of late-night venues is not market evolution, it is policy failure. If the government wants growth, jobs and a competitive visitor economy, it must act now.”