The Quarter the Summer Could Not Fix

The Q2 insolvency data for UK hospitality landed last week. According to Buchler Phillips, 840 accommodation and food service companies entered insolvency in the second quarter of 2026. That is up 10.2 percent on Q1.

The quarter that rose 10 percent contained the World Cup. It contained the school holidays. It contained a Brighton that was fuller than it had been in years. For anyone who ran kitchens through April, May and June and still called it a difficult quarter, this number explains why.

What April opened with

Q2 begins on April 1. This year, it opened with the National Living Wage rising to £12.71 an hour. Workers aged 18 to 20 moved to £10.85, an 8.5 percent increase. UKHospitality said the wage rises across the sector would add £1.4 billion to annual costs. That is not spread evenly or gently: it lands on day one of the quarter, before a single cover has been served.

Employer National Insurance was already sitting where the last two Budgets put it. Business rates ran through the spring revaluation unchanged. The food inflation forecast from the Food and Drink Federation at the time was nine percent by year-end.

April is what Q2 opened with. May is what followed. The World Cup did not start until June.

What June gave and what it could not give back

June 2026 was a good month for pubs with screens. Like-for-like pub sales rose 1.9 percent year-on-year in June, and insolvencies for the month fell 23 percent compared to June 2025. The tournament lifted bar trade in a specific way, on specific nights, in specific rooms.

What it could not do was undo what April had already cost. The quarter runs from the first of April to the last of June. The wage increase, the NI contribution, the rates bill: all of those ran for three full months. The World Cup ran for part of one of them. The Q2 number reflects the whole quarter, not just the June that featured on the front of the trade press.

The 10.2 percent rise on Q1 is the quarter, not the month. It is what the summer, in its opening chapter, actually produced.

The confidence number alongside the insolvency number

There is a separate data point worth sitting with. Since Andy Burnham became Prime Minister in July, UKHospitality has measured a sharp rise in operator optimism. The proportion of operators feeling positive about their own business more than doubled, moving from 18 percent to 37 percent.

That is a real shift. Burnham has backed a VAT cut to 10 percent, and the prospect of a rates reduction alongside it has given the sector its first sustained period of cautious optimism in years.

It is also 37 percent. The other 63 percent, who are not feeling optimistic, are operating in the same rooms, carrying the same cost structures, heading into the same September.

Sentiment changes what tomorrow looks like. It does not change what tonight costs.

What September starts with

Today is the last day of August. The bank holiday has run its course. The schools go back this week. The family trade that filled Brighton's midweek tables through July and into August disappears inside a few days.

The children's meals VAT scheme, which reduced the rate to 5 percent on qualifying plates from June 25, ends tonight. From tomorrow, the same plates run at 20 percent again.

September carries the same fixed costs that August carried. The rent, the rates, the payroll, the loan repayment: none of them adjust for the season. What changes is that the trading conditions that made Q2 hard before the World Cup arrived are back, without the World Cup.

What the room does from here

We run kitchens across Sussex: the Castle Inn, Tollgate, the Bull on the Green, the Berwick. The August bank holiday has been a strong close to a summer that earned what it needed to earn. From Tuesday, the room is what it is in October: excellent on the weekend, quieter through the week, and carrying the same costs regardless.

The Q2 number rose 10 percent because a quarter that contained a strong June still could not absorb what April cost. The autumn quarter contains none of June's advantages and all of the same costs.

Around 4pm, when the shape of the evening becomes clear, venues release on Halfseat the tables they expect to lose. Food at half price. Drinks at full price. A real cut of the booking fee going directly to the venue. Not a blanket discount. The seat that was heading toward nothing, earning something before the last cover leaves.

The summer was worth it. The number says the summer was not enough. September starts tomorrow, and the arithmetic does not know the difference.