Fine food retailers are weighing up their options ahead of a wave of employment cost hikes, after a number of supermarkets moved to shed staff.
Delis and farm shops told FFD they were taking action before increases in National Insurance contributions and National Minimum Wage levels take effect in April.
Meanwhile Sainsbury’s announced plans to cut 3,000 jobs, rival chain grocer Tesco outlined proposals to axe 400 positions and Morrisons revealed it would remove certain people in management roles.
A survey of more than 2,000 UK employers by the Chartered Institute of Personnel and Development found that around a third of companies were planning to lower their headcount.
Sangita Tryner, owner of Delilah Fine Foods, said the Nottingham deli had opted against replacing two employees who left this year as it battled with looming cost rises.
“It is a no brainer for all businesses,” she said. “The measures coming in will take about £30,000 off my bottom line. I think there will be redundancies from independent shops in this area.”
Delilah considered reducing its opening hours but has so far decided not to. Other options on the table include limiting table service in the café.
“The supermarkets are moving towards automation so don’t need as many staff,” said Tryner. “There is no way we could do that and satisfy the needs of our customers.”
Samantha Green, shop manager at Groombridge Farm Shop, said the Kent business had moved part-time staff on to zero-hours contracts to build-in flexibility ahead of cost rises.
“We have had some people for two years but we can’t guarantee they will have work,” she said. “We want them to work for us and we try to give them the hours but I have become more mindful of what shifts we really need covered.”
Green expects the sector to experience difficulties as employment costs rise.
“A lot of local farm shops have closed, including one that was operating for 20 years.”
John Farrand, managing director of the Guild of Fine Food, said independents should keep an eye on supermarket activity.
“Stealing good ideas or processes from the multis is allowed, but we should also take heed when they make major decisions like cutting thousands of jobs,” he said.
“This is obviously because of changes in NI and that is something that all SMEs should be looking at. The sad fact is that in many businesses at our end of food and drink, the increase may cost someone’s job.”
This article first appeared in the March edition of Fine Food Digest
