Why are pubs and restaurants struggling while the economy grows?

Just because the economy may have grown, a lot of people are still drowning with higher outgoings including energy costs. When people feel the pinch, non essential spending gets pulled back including eating out. Factor in uncertainly about future job security and that’s the reason why many food and beverage outlets are suffering.

The economy may be growing, but that doesn’t mean people feel any richer. When household budgets are stretched, eating out is one of the first things to go. People still want to enjoy themselves, but they’re thinking twice about a £100 family meal or a few rounds at the pub. For hospitality businesses, it’s a double squeeze. Customers are watching every pound while owners face rising energy, food and staffing costs. They can’t simply pass these increases on without risking losing more customers. I think we’re seeing people become much more selective about where they spend their money. Eating out is becoming more of an occasion than a regular habit, and customers want to feel they’re getting something special for their money. Businesses that offer genuine value, smaller affordable options and a great experience will be better placed to keep customers coming back.

I think the problem is quite simple. Eating out has become too expensive and, increasingly, the experience doesn't justify the cost.

With the cost of living crisis continuing to squeeze household budgets, eating out is one of the easiest expenses to cut back on.

At the same time, pubs and restaurants face higher wages, energy bills and other costs.

As a customer, I'm noticing apparent 'shrinkflation', with restaurants seemingly offering smaller portions, reduced menus, cheaper ingredients and poorer service. In some places, you don't even get a waiter taking your order anymore. You're expected to do it yourself through an app.

It's a real Catch-22. Businesses need to cut costs to survive, but in doing so risk driving away the very customers they depend on.

And with household budgets already stretched, customers can simply vote with their feet. Unfortunately, that could mean even more pubs and restaurants closing.

The British pub isn't just competing with the restaurant down the road. It's competing with the supermarket meal deal, the electricity bill and the mortgage payment.

Households are being more selective. A family meal that once felt like an affordable treat can now feel like a financial decision requiring a second thought.

Meanwhile, hospitality businesses face pressure from energy, food, staffing and property costs. Cutting prices isn't straightforward when margins are already tight.

But passing every increase to customers has a limit. If people stop coming through the door, higher menu prices won't save the business.

I'd rather see pubs and restaurants focus on genuine value: smaller affordable menus, early-evening deals, local events and reasons to visit beyond a special occasion.

The worrying part isn't simply that people are eating out less. It's that one of Britain's most social industries is becoming a luxury many households feel they must justify.