Posted: 11/11/2021

‘It’s on a knife edge’: warning over cumulative issues affecting fine food trade this winter

Independent food retail bosses have warned of a tough winter for the sector as economic pressures squeeze shops and their customers.

Leading figures laid out the harsh realities facing fine food purveyors with government pandemic support schemes petering out and operational costs increasing steadily.

The Coronavirus Job Retention Scheme – which allowed employers to furlough workers – ended in late September, as did the initiative allowing firms to claim back statutory sick payments to employees off with Covid-19. Meanwhile, VAT repayments deferred during the first lockdown are now due for many, the Recovery Loan Scheme closes at the end of this year and full business rates kick back in from early April.

Alongside this freezing of subsidies, retailers have been pelted with rising costs for energy and fuel, while wages are also expected to go up over the winter. Shortages of lorry drivers and food production staff have led to higher purchasing prices for retailers and customers are also feeling the pinch so have less cash in their pockets.

Georgie Mason, owner of Gonalston Farm Shop in the East Midlands, said it was going to be “a very, very difficult winter”.

“We can see another 25 per cent increase in the price of beef this year on top of the rise we’ve already had,” she said.
“Products are not coming in from Northern Ireland as they used to and we have manufacturers without the people to make products so only a third of an order turns up. It’s a nightmare.”

Mason pointed out that the National Living Wage, which must be paid to employees aged 23 and over, is expected to rise to £9.42 per hour in April.

“We will have to put our prices up, there is not a lot we can do. It is a double whammy as our costs are going up but so are our customers’.”

Sangita Tryner, owner of Delilah Fine Foods in Nottingham, added that on top of the predicted legislative increases in pay, labour shortages were driving up wages.

“We are being squeezed,” she said. “We are staying healthy as a business but it is on a knife edge.

“Business rates are kicking back in, power costs are astronomical and there are pressures from staff asking for pay rises because they think jobs are 10-a-penny.

“So overheads are creeping up and there is only so much you can put on the price of a cup of coffee. I fear for some independents this winter – big time.”

Andrew Goodacre, chief executive of the British Independent Retailers Association, urged ministers ahead of the autumn statement to maintain large discounts on business rates for shops. He said independents had more than £2 billion in debts after the pandemic.

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