CreditorWatch published its January Business Risk Index data on 18 February 2026 and the hospitality numbers are stark. Even if you have never run a café in your life, the figures deserve a place in your thinking, because other businesses’ distress has a habit of arriving in your debtor book.
What the data shows
Food services businesses are closing at a rate of 10.4% a year. That is the highest of any industry and roughly double the economy-wide average. Pubs, clubs and bars are closing at about 8%.
Payment behaviour tells the same story from a different angle. Some 12.4% of food-service invoices are 60 or more days overdue, against a national average of 5.9%. When more than one invoice in ten is two months late, suppliers to the sector are effectively funding their customers’ working capital.
The broader backdrop is not comfortable either. December 2025 recorded 1,366 insolvencies, the third-highest monthly total on record. CreditorWatch Chief Economist Ivan Colhoun expects insolvencies to “stay elevated or rise slightly” through 2026. The full analysis is on the CreditorWatch blog.
A second warning light from ASIC
Separately, on 25 February 2026 ASIC released data showing a spike in misconduct reports. The increase was driven by corporate governance failures, including failure to provide company records, insolvency matters and shareholder issues. Read together with the insolvency figures, the picture is of more businesses under strain and more of that strain surfacing as formal complaints.
Why this matters even if you are not in hospitality
Here is the practical point. If cafés, restaurants or venues are among your customers, your debtor book carries their risk. A wholesaler, a cleaning contractor, a linen service, an equipment supplier or a bookkeeper with hospitality clients is exposed to a 10.4% closure rate whether they think of themselves as being in hospitality or not.
The 60-day overdue figure is the early warning. Slow payment usually precedes failure, so the businesses that get hurt least are the ones watching payment behaviour rather than waiting for a formal insolvency notice.
Practical steps to protect your debtor book
- Watch your debtor days. A drift from 35 to 50 days across your hospitality customers is a signal, not noise.
- Run credit checks on new trade customers before extending terms, not after the first missed payment.
- Take deposits on larger jobs or orders. Cash up front is the simplest credit insurance there is.
- Consider trade credit insurance for larger exposures where one failure would genuinely hurt.
- Act early on overdue accounts. A polite call at day 7 beats a demand letter at day 90 and the earliest creditors to engage are usually the ones who get paid.
If you run a hospitality venue
The same data carries a different message for operators. Watch the warning signs in your own numbers, particularly creeping supplier arrears and reliance on tax money to fund trading. Get advice early, because options narrow as cash tightens. The operators with the most choices are the ones who seek help while there is still cash in the bank.
Before you act
This article is general information only and is not financial advice. Industry statistics describe the sector, not your business or your customers. Check the figures against the official source and talk to your adviser before making credit, insurance or restructuring decisions.