Alcohol spending in UK pubs down 60% since 2000 — while spending abroad up same amount

The amount of spending on booze in UK pubs, bars and restaurants plummeted by 60% between 2000 and 2024, while spending on alcohol abroad soared by the same amount, according to analysis from the New Economics Foundation (NEF), out today. The analysis found that households in 2024 spent £500 less a year on drinking outside the home in the UK than they did in 2000 (in consistent 2024 prices).

The figures are surprising because while individual alcohol consumption has declined slightly, this has been more than offset by growth in the UK population. This means the total units of alcohol consumed by the population has likely increased. Drinking has not entirely shifted to the home either, as the analysis finds that spending on drinking at home has fallen by 15% since 2000.

The research suggests that household spending on alcohol has shifted from the UK pub to overseas spending in bars and restaurants in holiday destinations. Spending of this kind grew by 60% between 2000 and 2024 – the same amount by which spending in UK pubs dropped.

People spending less money is only one of the challenges facing UK pubs. According to the analysis, there are a quarter less pubs in the UK now compared to the turn of the millennium. Pubs struggle to stay open in the face of increases to alcohol duties as well as challenges facing other high-street businesses like rising business rates, and supply chain, employee, and energy costs.

The government is expected to announce a U‑turn on previous plans to increase business rates, granting pubs an exception. But the NEF analysis shows that this is unlikely to seriously alleviate the pressures facing the pub sector or other businesses on the high street.

Researchers argue that the current business rates system is overly burdensome to struggling businesses, particularly outside the south-east, and fails to incentivise businesses to invest in their offer to punters.

Alex Chapman, senior economist at the New Economics Foundation said:

“Britain is operating two parallel economies. In one, business is booming with FTSE100 stocks at all-time highs, but in the real economy, pubs are closing and unemployment is rising.

“Given the struggles pub and hospitality venues are facing, tinkering with the tax system will not be enough. Instead, the government should use this moment to take bold action to rethink the system.

“We need a tax system that penalises land-hoarding, incentivises investment, and gives local control. These are essential to making highstreets places people want to go and spend their precious disposable income.”[MW1] [AC2]

NEF is calling for a complete overhaul of the tax system to make pubs and high streets more competitive with their international counterparts. This means splitting business rates into two separate taxes: a devolved property tax which would be paid by businesses occupying a property, and a national land value tax which would be paid by the landowner.

The think tank says that this would offer relief to businesses renting properties on the high street by lowering their taxes, while taxing land ownership fairly. As well as injecting cash into struggling pubs, other high street businesses like restaurants and hotels would also benefit.

Contact

James Rush – james.rush@neweconomics.org

Notes

The New Economics Foundation is a charitable think tank. We are independent of political parties and committed to being transparent about how we are funded.

The new briefing, Stopping the decline of our high streets, is available to read here.

Figure 1: Average annual household spend on alcohol consumed away from the home, in 2024 prices, and the UK pub count

Figure 2: Average annual household spend overseas in 2024 prices (excludes trips for business purposes)