Britain’s pub sector remains under significant financial strain, with one in eight pubs still at risk of insolvency. In the final quarter of 2025, 181 venues closed, driven by higher running costs and reduced customer spending.
To support businesses navigating these pressures, Liquidation Centre has shared practical steps that pubs and wider hospitality operators can take to regain control before difficulties escalate. Richard Hunt, Director of Liquidation Centre, offers insight into the actions that can make a tangible difference.
Five Key Steps to Help Prevent UK Pubs Insolvency
1. Carry Out a Detailed Cost Audit
Understanding exactly where money is being lost is essential. A full cost audit can highlight inefficient supplier contracts, unnecessary spending, stock waste, and rising utility expenses.
Richard Hunt explains:
“For pub owners, margins are tighter than they have been in years. No one opens a pub expecting to worry about insolvency, but the sooner you take a close look at the numbers, the more control you keep. A cost audit can reveal where money is slipping away and fix those pressure points before they spiral.”
2. Review Pricing Regularly
Strategic pricing updates allow pubs to protect profitability while avoiding sudden increases that frustrate customers.
“Small, meaningful adjustments such as introducing premium menu offerings or rebalancing prices across the menu can boost profitability without impacting every product. Pricing strategies that are clear and well executed help pubs respond more confidently to market pressures, rather than reacting too late, when steep price changes could result in damaging customer trust.”
3. Examine and Renegotiate Lease Agreements
Fixed costs like rent often put the heaviest strain on businesses during slower trading periods. Reviewing lease terms can unlock opportunities for reduction or renegotiation.
“Taking a close look at lease costs can open the door to renegotiation and give businesses more breathing room. It’s a practical step that can ease pressure on overheads and help pubs stay resilient during tougher trading periods, while building a bit of financial headroom.”
4. Explore Additional Revenue Streams
With drink sales alone no longer a reliable foundation, diversification is key to stability.
“Transforming the pub into a space that offers more than just drinks can open up new income streams. Quiz nights, daytime co-working offers, lunch deals, or even selling local products can all bring in extra revenue and attract a broader mix of customers.”
5. Speak to Advisors and Lenders Early
Engaging early with professional advisors gives businesses more options — and reduces the danger of sliding toward insolvency unnoticed.
“Insolvency practitioners and advisors can bring experience most operators simply don’t have in-house. From cash flow forecasting to landlord negotiations, the key is knowing whether the business is facing a short-term liquidity problem or if there’s a deeper profitability issue. This can help to differentiate between a business that may simply have a temporary liquidity problem, one which may need restructuring, or a business with profitability issues. All of these need to be tackled in a unique and accurate way, making this distinction vital.”
Additional Guidance for Pubs and Hospitality Businesses
Hunt also stresses the importance of focusing on stock management, menu engineering, and staffing to maintain financial control.
Richard Hunt adds:
“Alongside the above, struggling pubs and hospitality firms may also consider menu engineering and stock optimisation. This can boost the pub’s basic foundations by reducing wasteful spending on unprofitable items and focusing more on high-margin, popular drinks/dishes that support cash flow. With business costs remaining high for many establishments, making sure stock and resources are used effectively can play an important role in reducing the risk of insolvency.
“Another key area to keep under control is staffing. Smart staffing solutions and choices can keep a business afloat in a tough climate. Keep workforce capacity in line with customer demand and regularly analyse payrolls to keep this manageable. At the same time, it’s important not to compromise on service quality, as maintaining a loyal customer base is vital during challenging economic periods. Above all, never ignore any financial warning signs. Acting early can make all the difference, while leaving it too late may result in insolvency that could have been avoided.”
Press Release Notes:
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