Specialist business property adviser Christie & Co has launched its Business Outlook 2026 report, reflecting on a year of ongoing challenge for the hospitality sector, but also one that showed encouraging levels of buyer activity and longer-term commitment across the UK’s pub and restaurant markets.
The report outlines how operators faced continued cost pressures in 2025, with rising labour costs, higher business rates and inflation making trading conditions difficult. In the pub sector, summer trading was strong for many, and turnover held up well overall. But with margins under pressure, about a third of pubs struggled to turn revenue into profit. Many responded by cutting back on opening hours, with early-week closures becoming more common.
The restaurant sector also had a mixed year. The UK’s Top 100 groups reported double-digit growth in sales and profit in the first half of 2025, thanks to earlier cost-cutting and a focus on stronger sites. However, that confidence took a knock in the second half of the year, following the Autumn Budget, which added more costs in areas like payroll and rates. Smaller, independent restaurants—which make up around 80% of the market—were especially affected by rising food prices and limited access to investment. Even so, many kept loyal customers by offering local produce and unique menus that set them apart.
Despite the challenges, the report shows that there is still demand for quality sites. In the pub sector, 91% of freehold pubs sold by Christie & Co in 2025 were bought to stay as pubs, and fewer than 2% of sales were considered distressed. Over half were bought by private individuals, showing that there is still appetite at the smaller investor level.
The restaurant market also had some bright spots. Franchising continues to appeal to operators looking for more certainty and support, while takeaway and drive-thru formats remain popular, even with rising rents. And although 62% of people in the sector said they felt negative about current trading conditions, only around one in five are thinking about selling in 2026. Most operators are still in it for the long term, and looking to adapt rather than exit.
Looking ahead, Christie & Co expects the market to stay split. Well-run pubs and restaurants with strong customer appeal are likely to keep performing, while those that can’t adjust may face further pressure. Larger operators are expected to keep selling underperforming sites and reinvesting where it counts, while technology will continue to play a bigger role in making operations more efficient and improving service. The report also suggests that sustainability and ethical sourcing will become more important to customers in the year ahead, and are likely to influence how businesses plan.
Stephen Owens, Managing Director – Pubs & Restaurants at Christie & Co, said, “2025 was a challenging year for hospitality, but resilience and adaptability have been evident across both pubs and restaurants. Operators who invest in their offering, embrace technology, and respond to evolving consumer expectations will be best placed to thrive in 2026.
“Despite cost pressures, demand among buyers looking to acquire hospitality venues remains strong and we anticipate renewed momentum as financing conditions start to improve.”