Accommodation and food services insolvencies fell 19% from 327 in July 2025 to 265 in August 2025 and were slightly lower year-on-year from 271 in August 2024. After three months of rising insolvencies the sector saw relief. Good summer weather encouraged consumer socialising and produced 1.2% GDP growth in August. Persistent food inflation and difficulty passing on further costs make continued declines unlikely. Operators face higher National Insurance and record-high wages as employers try to retain staff, creating a double financial burden. Pubs benefited from hot weather; restaurants and bars underperformed. The sector awaits budget measures to support growth without increasing inflation.
"Today's company insolvency statistics show accommodation and food services insolvencies dropped 19% from 327 in July 2025 to 265 in August 2025. Insolvencies in the sector were also down slightly year-on-year from 271 in August 2024. After three consecutive months of rising insolvencies, the latest fall will come as a relief for the sector. This was likely helped by good weather over the summer, encouraging consumers to go out and socialise, which led to GDP growth of 1.2% in the sector in August."
"Not only are operators having to factor in higher National Insurance costs, but wages in the food and accommodation sector also hit a record high in August, as operators try to hold onto staff. This combination results in a double whammy for businesses who are caught paying higher hourly wages and more tax on these payments. Hospitality sales have been lacklustre for most of this year."
Read at London Business News | Londonlovesbusiness.com
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