A new analysis of UK business insolvencies has revealed that the restaurant sector has seen the largest amount of liquidations over the past decade, with the wider hospitality sector facing increasingly challenging trading conditions during the period.
Experts at Liquidation Centre analysed official data from the ONS and the Insolvency Service going back to 2016, finding that 3,351 restaurants underwent liquidation proceedings during the period.
The sector has faced mounting costs and weakening consumer confidence during this period, following the successive shocks of Brexit, the COVID-19 pandemic and its associated lockdowns and broader economic uncertainty.
These economic pressures have led to a raft of closures, with major brands including Pizza Hut, Leon and TGI Fridays among those to have recently announced the shuttering of multiple outlets.
Reflecting the impact of challenging trading conditions across the wider hospitality market, public houses and bars ranked fifth during the period, registering 1,507 liquidations. Pubs, in particular, have been badly affected by the pressures facing the sector, with approximately 2,000 individual pubs estimated to have closed in England and Wales in the five years from 2020.
The cost headwinds facing restaurants and bars show little sign of slowing down, with increases in National Insurance Contributions, the Minimum Wage, the National Living Wage and alcohol duty adding further pressure.
Ranking second behind restaurants in the Liquidation Centre data, the management consultancy activities sector saw 3,082 liquidations over the period. This has been described as reflecting the vulnerability of smaller advisory firms that are heavily reliant on project-based income.
The construction sector has been another industry that has faced huge cost pressures over the past decade, a fact duly reflected in the development of building projects ranking third (2,904 liquidations), amid construction inflation, weaker demand and higher borrowing costs.
Commenting on the findings, Liquidation Centre Director Richard Hunt said: “These figures show just how tough the environment has become for businesses across the UK, particularly in smaller towns. When companies enter liquidation this has a real visible impact on the local economy, especially on high streets. When businesses close their doors, it creates empty shop fronts, fewer jobs, and reduced footfall for other businesses. Over time, that makes it harder for the rest of the high street to survive.”
“With costs set to rise in April, including National Insurance, the Minimum Wage, and the National Living Wage, it’s more important than ever for directors to keep a close eye on cash flow, manage overheads carefully, and act early. Many business failures happen not because the warning signs aren’t there, but because tough decisions are left too late. By regularly checking stock, pricing, and staffing, businesses can respond quickly when numbers start slipping and give themselves a better chance of staying profitable. In this uncertain climate, being proactive can make all the difference.”
On a geographical basis, the report found that Norwich, East of England, had the highest liquidation rate for towns across the UK, with signs indicating that this is already increasing in 2026.
The North West of England, meanwhile, saw the highest regional liquidation rate overall at 3.26 per cent, with numerous towns in the region ranking in the top 10.
Despite the challenges facing the sector, there are signs of improving M&A activity and strong investor interest in the UK restaurant market
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