Dry January blamed as pub sales fall flat

Tom Haynes

Fri, February 20, 2026 at 6:30 PM GMT+9 2 min read

Unusually poor January comes as another blow for the hospitality sector already burdened by high labour, tax and energy costs - E+

Under-pressure pubs suffered a slow start to the year as Dry January and miserable weather led to a fall in spending.

Sales figures from more than 100 leading hospitality firms showed that spending in January dropped by 0.1pc compared with last year, according to data compiled by consumer intelligence firm NIQ.

Analysts said pub-goers had been “keeping a close lid on their outgoings” at the start of the year, after a flurry of spending in December. NIQ said wet weather and Dry January also hit sales.

Figures from Alcohol Change UK show roughly a third of Britons took part in Dry January in 2026, with 41pc of those in Greater London swearing off alcohol for the month.

NIQ data suggest this may have led to a sales slump in the capital. Like-for-like sales climbed 0.1pc beyond the M25, but dropped 0.4pc inside it.

The unusually poor January comes as another blow to a sector already burdened by high labour, tax and energy costs.

The Telegraph has been campaigning to save British pubs from the increased burden of red tape and high tax bills.

In January, Rachel Reeves, the Chancellor, was forced to announce an emergency support package for publicans after the sector sounded the alarm about extraordinary business rate rises.

Squeezed margins

NIQ data showed major pub chains had outperformed restaurants every month since the start of 2025. However, bars had a weak January, recording a sales slump of 4.9pc.

Saxon Moseley, of tax firm RSM UK, which assisted in the report, said: “The new year brought little respite for operators as the industry reported flat like-for-like results as low consumer confidence persisted into 2026, which was exacerbated by wet weather.

“With looming increases in business rates and National Minimum Wage, coupled with significant compliance costs associated with the new Employment Rights Act, the industry is in desperate need of growth.

“Recent efforts to stimulate demand through discounting might help in the short term, but with margins squeezed, a more sustainable recovery will be required to avoid further losses on the high street.”

Separate analysis by insurer Coface showed pub and bar insolvencies were still significantly higher than pre-pandemic levels.

Around 791 companies within the “beverage serving activities” sector – which were mostly pubs – went insolvent in 2025, 2.5pc more than the previous year and 34pc higher than in 2019.

Jonathan Steenberg, Coface’s lead UK economist, said pubs were “feeling the brunt of recent economic and policy developments.”

The company’s data showed the majority of insolvencies happened after April, when the effect of Labour’s first tax-raising Budget kicked in.

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