Recently, news broke that The Anchor in Digbeth has closed its doors, marking the loss of another much-loved venue to mounting financial pressure.
Hockley Social Club also announced it will close at the end of the year.
Two independent powerhouses, both gone far too soon.
These aren’t just closures, they’re gut punches to Birmingham’s hospitality scene. Both venues were vibrant, community-driven, and widely admired. Their losses are a stark reminder that nobody is immune.
These are not businesses failing – they are being failed by rising costs, shrinking margins, and a system that no longer works for independents.
So, what can we do about it? Because it feels a whole lot like screaming into the void…
There’s never been a phrase more accurate than “use it or lose it” whenever an independent venue shuts its doors. The point being that every time you grab a coffee, pick up a bite of lunch, or go for a pint, choosing a local, independent business over a chain is a conscious choice to support a person, a small business, and the community.
However, customer behaviour is now only one element in a broader, multi-faceted crisis facing the sector – just one prong in a sustained and complex attack on hospitality’s viability.
Yes, footfall matters. Currently, a slow day, night, or service has a greater impact and is more concerning. There is more pressure. However, the “use it or lose it” phrase oversimplifies or potentially misses the bigger picture. It assumes the choice not to dine out is a conscious one, when for many, it’s becoming increasingly not financially viable. The problem isn’t just that people are making different choices; it’s that many don’t have the choice at all at the moment. The squeeze is being felt everywhere.
Customer numbers are part of the equation, but so are rising costs, stagnant wages, and squeezed household budgets. The numbers just aren’t stacking up, even if you are getting bums on seats.
Shit sandwich
The broader squeeze
- Job losses and closures – UK hospitality lost 58,000 jobs between January 2024 and January 2025, and insolvencies are at a 17‑year high, mirroring 2008–09 levels. https://www.uhy-uk.com/insights/uk-hospitality-sector-faces-rising-insolvencies-and-job-losses-2025
A survey of 8,300 venues showed 70% expect to cut staff, 60% to cancel investment, while 15% fear closing at least one site. https://www.thedrinksbusiness.com/2025/02/hospitality-sector-faces-job-cuts-amid-april-cost-hikes/
In April 2025, 67 pubs closed, the highest monthly total since July 2024, and 21% of pubs reported being on the brink.https://www.thescottishsun.co.uk/money/14950625/pubs-crisis-tax-hikes-wage-increases/ - Tax pressure related to closures – Employer NI contributions jumped from 13.8% to 15% in April, costing hospitality an additional £3.4 billion. One-third are operating at a loss, 60% have cut jobs, and 76% have raised prices. Many pubs alone face roughly £14,000 extra cost per year, equivalent to 12 lost trading days.
The cost of living crisis
It would be remiss of us not to acknowledge that this is a massive factor in why many people aren’t going out or why they might be making different choices. Cost of living is having a profound impact on the lowest earners, but it’s also impacting medium/medium-high earners. Those who would consider going out once a week are also having to cut back on their spending. Hospitality has lost its bread and butter – the regular.
- Over 60% of UK households entered 2025 with lower disposable incomes; the lowest-earning fifth were £70 per week short. https://www.retailgazette.co.uk/blog/2025/01/asda-disposable-income/
- While average disposable income reached £251/week, above pre-crisis levels, it’s still weaker in real terms for most.
- The Resolution Foundation reports working households will be £400 worse off in 2025–26, with the bottom half seeing a 3% real income cut, around £500/year.
- The Joseph Rowntree Foundation (JRF) warns that low-income families in the UK remain in persistent financial hardship. In their latest report, they found that 60% of low-income households can’t afford essentials, and 5.4 million people across the UK have experienced food insecurity in the past year. Many are turning to credit or borrowing just to make ends meet. Citizens Advice reports a record number of people struggling with problem debt, and over 3 million households have fallen behind on essential bills. https://moneyadvicetrust.org/latest-news/7-million-people-behind-on-household-bills-as-costs-set-to-rise-further-this-april + https://www.jrf.org.uk/cost-of-living/jrfs-cost-of-living-tracker-winter-2024
NI hikes and NHS funding
- The ripple effect is completely crushing Independent hospitality: elevated NI → crushed margins → job losses → reduced earnings → less spending. It’s a cycle. Everything is happening all at the same time.
- The April NI hike was part of a plan to raise £25 billion, with £22.6 billion allocated to NHS and social care budgets. https://www.bbc.co.uk/news/articles/cgl409gww1go?utm
- Chancellor Reeves earmarked £29 billion extra for the NHS annually, a 3% real-terms budget increase. https://www.theguardian.com/politics/2025/jun/11/spending-review-reeves-vows-to-renew-britain-with-big-rises-for-nhs-housing-and-defence
And, Birmingham feels it
This city is home to a thriving community of rising talent, students, and young professionals who seek community, culture, and quality. However, even seemingly small increases in rent, bills, and taxes mean that going out is becoming a rare treat, rather than a routine occurrence.
What needs to happen:
- Reverse the employer NICs increase
- Introduce a reduced VAT rate for hospitality
- Deliver a root and branch reform of the business rates system
Currently, the sector requires targeted support. Birmingham’s hospitality industry is locked in a vicious cycle of rising costs, squeezed wages, and dwindling customer footfall.
What can you do?
Whether you’re in the industry or simply value your local pub, café, or restaurant, there are ways you can help:
- Write to your MP – share your experience or concern using the template provided by UKHospitality
- Support local venues whenever you can – even small spends make a difference
- Share the message – spread awareness on social media or within your networks
- Add your voice – if you’re a hospitality professional, speak up through your trade body or regional forums
Tonic MD Conrad Brunton is joining forces with other leading voices in the city’s hospitality sector to discuss what can be done to make sure the sector is heard. This Hospitality Taskforce aims to unite the voices in our sector and amplify our collective voice. Sick of screaming into the void? Come join the taskforce at the next meeting on the 29th of July at The Grand Hotel. If you’d like to be part of the movement, email caitlin.allwood@tonictalent.com
