Research carried out by Funding Circle, the UK’s leading SME finance platform, reveals how restaurants, pubs, cafés and food-led independents are playing a key role in the revival of the high street in 2025.
The key findings of the report:
- Eating out spending jumped +9.3% (Q2 2025)
- Drinking in pubs & bars up +9.2%
- Over 25% of all high street spending in Manchester now goes to food & drink
- York’s visitors account for 40% of all in-centre spending, with much of it on dining and hospitality
- London, Edinburgh, Manchester, York and Brighton are the top cities where food & drink are powering growth
The report highlights that while retail alone won’t save the high street, food and leisure operations are delivering footfall, resilience and growth across the UK.
From vegan cafés in Brighton to independent coffee shops in Manchester and boutique bakeries in York, hospitality has become the cornerstone of a modern, thriving high street.
Funding Circle’s report is optimistic for the future of the high street, which for many years has witnessed businesses closing down and uncertainty. Their research found that cafés, restaurants, pubs and food-led operators are driving a new era of high street vibrancy.
Funding Circle’s authors recognised that while the UK economy still has a long way to go when it comes to recovery, there are signs that consumers are spending more and differently in 2025.
Deloitte’s consumer confidence tracker shows that although spending on everyday essentials fell by 4.6% Q2 (2025) discretionary spending rebounded, with food and drink showing the strongest growth, as summarised above.
Their research also found that whilst city centres occupy just 0.1% of the UK’s land, they account for over 9% of all face-to-face consumer spending. High streets with strong visitor appeal, younger demographics, or high disposable incomes are thriving thanks to a diverse food and drink offering.
Unsurprisingly, London has experienced the strongest all-round recovery, with a thriving multicultural dining scene and premium hospitality experiences.
In Manchester, over 25% of high street spending goes on food and drink, boosted by Gen Z-led indie cafés, bars and street food operations.
York’s tourists account for 40% of all spending, further fuelling the boom in restaurants and independent food outlets.
The vacancy rate in Edinburgh is low (9.3%) with leisure and hospitality operators driving growth and boosting footfall across the city centre.
In Brighton, growth is being fuelled by vegan cafés, craft beer bars and alternative food concepts, which are thriving in a diverse, younger market.
By contrast, cities like Newport (19% vacancy rate) and Bradford (18%) remain dependent on retailers and have been much slower to diversify into food and leisure.
Driving the return to town and city centres is the unique offer of bars and restaurants, which unlike retail operations, cannot be replicated online.
The diversity of the venues, especially across the independent sector, is also appealing to more discerning customers who are looking for authenticity and quality, and who are prepared to pay more for a unique experience.
Demand from Gen Z and Millennials for wellness-focused, ethical and experimental offers is further invigorating the high street.
Whilst Funding Circle’s report is encouraging for the leisure and hospitality sector, this needs to be set in the context of rising costs that continue to force many leisure operators to close down their businesses.
From the increases in employers’ National Insurance contributions, to the hike in the minimum wage and on-going pressures from high energy costs and the reduction in business rate relief, leisure and hospitality operators are being squeezed from every angle.
Add in rising food inflation and high interest rates, which impacts on the amount of disposable income for increasing numbers of households, and a different picture emerges.
Since the Labour government’s first Budget in October 2024, UK Hospitality has reported that 89,000 jobs have been lost in restaurants, bars, pubs and hotels, based on their analysis of data from the Office for National Statistics (ONS).
At Hand Crafted Drinks Magazine we’re very much glass half full people, especially if it’s a glass of hoppy IPA or smooth sipping gin, so although the leisure and hospitality sector has its challenges, in certain parts of the country there is a thriving food and beverage sector that is helping to revive what once were failing high streets.
About Funding Circle
In 2024, Funding Circle helped support over 87,500 UK jobs and contributed more than £2 billion in tax revenue through the small businesses it financed.
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