The plight of restaurants in the UK and US in 2026
Lela London
I am no longer reassured by full restaurants.
This is new for me. For years, a packed room felt like a kind of victory. From the outside, proof that the food was good, the staff sincere, and the atmosphere persuasive enough to pull me out of pyjamas and into my wallet. On the inside? A full restaurant suggested health. Momentum. Maybe, if not safety, then at least the promise of it.
Now I find myself scanning busy dining rooms with a less optimistic instinct. One that doesn’t ask ‘is this working?’ but ‘how long can this possibly last?’
The dissonance is subtle but persistent. The food is good—often really good—the interiors immaculate, the staff charismatic (to the point of bordering on intimate). On paper, these places are doing everything right. And yet, if you stay long enough, or talk to the right person, or hang back after service when the adrenaline drops, the conversation drifts away from the pass and toward something, dare I say, sinister.
It usually starts with a joke that isn’t really a joke. Someone mentions maybe making rent this month. Someone else mentions energy. Business rates surface with the ease once reserved for olive oil prices or staffing shortages, as though the very architecture of the room has begun to weigh on the people inside it.
The tone is never hysterical, either. That’s what, to me, feels most unsettling.Instead, it’s weary, pragmatic, resigned voice of someone who has done the math too many times to believe it will suddenly come out differently.
There was a period, not so long ago, when effort still seemed to correlate with outcome. If you worked hard enough, if the food was good enough, if people kept coming, you might not thrive but you would survive. But that sense of possibility feels narrower now, tightened by forces that have very little to do with cooking.
The contradiction at the heart of this moment is that many restaurants appear to be flourishing. Despite the headlines, people have not stopped eating out. If anything, dining out has taken on added symbolic weight, standing in for connection, pleasure, even resilience. Any Londoner or New Yorker knows the queues all too well.
Still, the conditions under which restaurants have to exist have become markedly more brittle, less forgiving, more abstracted from lived reality.
In the UK, the most immediate pressure is of course business rates—the tax on the building rather than the business. A revaluation comes into force this year, with pubs and hospitality venues facing higher rateable values regardless of whether trade has meaningfully improved, because rates are tied not to profitability but to what a premises is deemed capable of earning.
The House of Commons Library lays out the mechanics with unusual bluntness, and it is difficult to read without understanding why so many neighbourhood operators are alarmed.
Industry bodies have been even more direct. UKHospitality has warned that without reform, more than 2,000 hospitality venues could close in 2026 alone, and the figure could very well sell the situation short.
What makes business rates so corrosive is their indifference. They don’t flex with footfall or soften after a bad quarter, and for restaurants that signed leases in more optimistic times—with larger spaces, great locations, and ambitious second sites—this is a truly existential threat.
Alcohol duty adds another layer of pressure. Uprated again from February 2026 in line with inflation, it tightens margins on drinks at the precise moment diners are becoming more resistant to price increases—particularly on the wet side, where restaurants have historically relied on profit to offset rising costs elsewhere
Restaurant closures are increasing in the US and UK
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When JD Wetherspoon warned that higher labour costs and business rates would hit profits last week, it almost felt declarative. Read between the lines, and the fact that large operators tend to absorb pressure longer than independents starts to tell a much bleaker story.
It’s tempting to frame this as a UK-specific malaise, but the pattern is recognisable in the US, too. Similarly, restaurant closures have accelerated despite steady consumer demand, with rising rents, labour shortages and financing costs cited far more often than falling footfall. And, according to data from Black Box Intelligence and the National Restaurant Association, independent restaurants are the ones feeling it most.
The most unsettling effect of all this might be just that: the category of restaurant it leaves most exposed. Not the small-fries obviously struggling, and not the rarefied destinations that can still command a premium, but the careful middle: neighbourhood rooms with great plates and fair prices, second sites opened in good faith, places that were never meant to be “destinations” so much as passion projects.
They’re the closures I feel the most. The ones announced via an Instagram post, thanking staff and customers, with a short line on rising costs. With comment sections flooded by outrage over what has gone missing.
And none of this looks like collapse. It looks like attrition.
So, perhaps what this moment asks for is not reassurance, but attention.
Restaurants have always existed at the intersection of pleasure and precarity. What feels new is not the fragility itself, but how visible it has become.
Still, people keep coming. They keep booking. They keep believing, at least for an evening, in the value of sitting together and sharing food. Because, for all the structural pressure, restaurants remain one of the few places where people still choose to be together.
In fact, the restaurants I worry about least now are not necessarily the biggest or the flashiest, but the clearest. The ones that understand exactly what they are, who they’re for, and what they can realistically sustain. Fewer covers. Shorter menus. Smarter drinks.
A full restaurant may no longer be a guarantee of safety, but it is still a signal of something essential: we love restaurants. And as long as that remains true, there is room not just for survival, but for a harder-won kind of industry revival.
Source: https://www.forbes.com/sites/lelalondon/2026/01/29/why-even-great-restaurants-are-closing-in-2026/
