In September this year, 265 businesses in the accommodation and foodservice sectors went into insolvency, up only slightly from 262 in September the previous year, suggesting businesses are holding on to see through trade during the festive season.
“After a prolonged period of disappointing sales, many are hoping the Christmas period delivers a much-needed boost, so they can build up their depleted cash reserves,” says Saxon Moseley, partner and head of leisure and hospitality at RSM UK.
“Consumer demand remains subdued for the most part, with pubs being the main beneficiaries of a “flight to value” by households. Consumers still want to socialise, but are doing so in the most cost-effective way.
“The risk is that the fear of the unknown of what will be announced in the budget causes them to stop spending completely, which would be a further setback for the industry.”
Moseley adds that the future of many hospitality businesses will be dependent on the budget, which is due to be held on 26 November.
“If hit with more tax hikes, on top of April’s rise in staff costs, it will inevitably be the end of the road for some. But if offered targeted support and an injection of investment, this will provide a lifeline for many businesses at the heart of the UK economy,” he says.
“With some operators taking a ‘wait and see’ approach in the lead up to the budget, standing completely still could have a negative knock-on impact.
“Understandably it’s difficult to make investment decisions until businesses get more certainty. However, operators must focus on conserving cash, maintaining the customer experience and cost cutting, including renegotiating prices with suppliers to get the best deal possible.”
Figures still ‘historically high’
A separate analysis of the insolvency figures carried out by Buchler Phillips shows that the number of hospitality businesses entering insolvency eased very slightly across the third quarter of 2025, but remain historically high.
Some 857 accommodation and food service companies closed in the three months to September 2025, down 2.7% from 881 in the second quarter of this year, but matching the same three months of 2024.
“Life remains extremely tough for the hospitality sector,” says Jo Milner, managing director at Buchler Phillips. “Along with retail and construction it’s right up there with the worst hit UK business sectors.
“Pressure on consumer spending remains, staff costs have risen significantly, and pre-budget uncertainty hasn’t helped.”