THE COST of living crisis has seen businesses faced with soaring energy costs and the price of goods and fuel spiralling.
Independent businesses have been hit hard by the crisis – especially coming off the back of the coronavirus pandemic – and face a dilemma over how much of these increases they are forced to pass onto their customers.
A number of businesses in Newport have already closed their doors, with the owner of Monusk Tapas and Wine Bar saying their energy bills jumped from £150 to £800 a month, and the owner of Ragtag Pizza saying that rising costs were “a huge factor” in his decision to close, after “basic prices had more than doubled”.
And today, the South Wales Argus is launching a Back Our Businesses campaign, urging people to shop, eat, drink and buy local and support local traders where they can.
Independent businesses are “the lifeblood of any town or city centre”, said Kevin Ward, manager of the Newport Now Business Improvement District, and the BID recently joined the #BusinessSOS campaign which has warned the Government of the issues the high street faces.
Jack Slocombe, co-owner of Quarters Coffee in Millennium Walk, said they had seen their energy bills triple in recent months, while footfall in the city was down.
“Everyone’s been affected by it,” he said. “It’s every sector. But unfortunately the hospitality sector is going to be the first place people are going to cut back.
“Rent is going up and energy are going up and the cost of goods is going up – milk is the most expensive it’s been.
“We’ve had to make changes to the business as we don’t feel like we can pass all these costs on. If people are already thinking they can’t afford the luxury trade, we’d only be adding to that with price increases.
“I don’t want to paint a bleak picture of Newport. But we don’t have the financial clout of one of the big chains. This is family-run – I run it with my wife. I think people enjoy seeing that.
“We’re optimistic as we have such fantastic customers. For us as a business we’re not about trying to put cash in the till, but we want to help build a community as well.
“It’s a challenge, but it’s a challenge that we enjoy.”
Mr Slocombe said he thinks people are more willing to support independent businesses after the pandemic, having built up relationships with the owners and seeing how their support affects them.
“It’s a shame seeing offices and businesses closing down,” he said. “It has a knock-on effect on us too. I’d like to see more traders in the city.
“The reality now is that in five years’ time, people will want to come to the city centre and see all the independent businesses they go to now. But to do that, we’ve got to support them now.
“Covid helped a lot of people’s perception of supporting local because they saw they impact of that.
“I feel like Newport does support independents very well. It will be nice to see many businesses thrive.”
Will Green, co-owner of Rogue Fox Coffee House in Clytha Park Road, said the rising cost of stock was “concerning”, but said he had faith the community would look after the city’s independent businesses.
“I don’t think we’ve been hit as hard as some people have, but we have definitely noticed the difference from our energy bills going from £2,000 a year to £5,000 a year,” he said.
“Also with the stock we use. Cooking oil has gone from £20 to £40 in the last couple of months, and coffee has jumped to about £150 a month.
“It’s a little bit concerning. At the moment we haven’t made any changes to our prices. We’ve historically raised our prices maybe once a year to help combat that.
“We’re here to serve the community and the community has always looked after us.
“Newport I’ve always seen as a safe haven for independent businesses. A few have shut down recently which is a little bit scary.
“We always have faith in our community of coffee drinkers. We did it with Covid. We were closed for 12 weeks when we opened up we saw a lot of faces again.”
Poppy Morgan, manager at Holy Cheesus, just over the road from Rogue Fox, said their costs had tripled in the past six months, but also spoke about the benefits of supporting independent businesses.
“Usually as soon as summer’s over we see a spike in custom but it’s not been the same this summer. We’ve seen a decline,” she said.
“We see our regular customers – they have stuck with us – but footfall has declined.
“The price of a box of cheese has tripled in the past six months. So we’ve increased prices but you can’t keep doing that. You can’t charge £10 for a toastie.
“I know the major supermarkets and traders are losing a little bit of money, but independent traders definitely need people’s support at the moment. Especially as we’ve only just bounced back from Covid.
“We rely on our regular customers. It’s about keeping a good rapport with them. We try to do a little bit extra for our customers.
“They are going to have a much nicer experience catering for everyone’s individual needs rather than treating everyone as a consumer.”
Bakehouse Cakes opened on Bridge Street four months ago. Owner Neil Evans said he had seen the costs of ingredients rising sometimes daily.
However, he said he felt that people would rather support an independent business over a larger chain.
“I do my shops after I finish in here,” he said. “It goes up daily sometimes. The cost of ingredients is sometimes more worrying that energy costs as you don’t want to pass that on.
“All our stuff is made fresh in store every morning. It just tastes better.
“We try to keep prices as competitive as possible. Some things are more expensive but people understand for anything freshly made, you pay a little bit more.
“I think people really want to support [independents]. A lot of our customers would rather come to us than walk to some of the bigger places, as they know we are making everything fresh.”
Independent businesses have been “the growth sector in Newport” over the past few years, Mr Ward said, and supporting them now was the main way to ensure they survive.
“Independent businesses are the lifeblood of any town or city centre, and Newport is no different,” he said.
“We have some fantastic independents in the city centre – ranging from bars to bakers, hotels to hairdressers, coffee shops to clothes stores, and everything in between.
“Independents have been the growth sector in Newport over the last three years, despite all the problems caused by the pandemic and now inflation and the energy crisis.
“The simplest way of ensuring our independents survive is to use them and support them.
“The majority of BID members are independents and we offer a wide range of support services to help them during both normal and the more extraordinary times we have experienced over the last two to three years.”
This support includes: a shopfront improvement grant of up to £1,000; a savings advisory service, a Newport gift card which can be spent in more than 70 independent businesses in the city, a City Centre App which lets businesses to offer deals and list events, providing training schemes, and lobbying the government at local, Welsh and UK level on behalf of its members.
“The BID also provides a graffiti removal service, daytime Street Ambassadors six days a week and a new Night Ambassadors service on weekends, and we are about to rent two vacant retail units in the city centre to use as pop-up shops to encourage more independents into the city centre,” said Mr Ward.
“All of our services are free for BID members and our aim is to continue to find as many ways as we can to help businesses in the city centre.”
A Newport City Council spokesperson said it was important for people to continue to support independent businesses, but added that more support was needed from the Welsh and UK Governments to help during the cost of living crisis.
“Newport City Council supports small businesses in the city with both practical and financial assistance, recognising they are vital to the success and prosperity of the city,” they said.
“It is also important that local businesses are supported by local people and we urge people to shop and dine out locally, and use local traders, wherever and whenever possible.
“Businesses need regular customers – ‘use them or lose them’ has never been more true.
“This year, the council’s unique city centre rates scheme gives eligible businesses a 25 per cent reduction on their rates bill on top of the Welsh Government’s rate relief for retail, hospitality and leisure outlets.
“This means that many city centre business will only pay 25 per cent of their business rates this year.
“A scheme providing business grants to small and medium sized businesses has been running for several years and last year the council launched its most generous package of support.
“The council and UKSE also jointly administer the business support grant scheme which helps to launch many new ventures each year and aims to create local jobs.
“However, the future remains uncertain for all businesses as they, and their customers, deal with increasing cost-of-living price rises. The council is also likely to face significant financial challenges in the coming months.
“It will continue to look for ways it can assist local businesses, but more government funding will be essential.
“While the UK and Welsh governments are providing packages of support to business and residents, the council believes this needs to go much further.”
The UK Government last week announced an Energy Bill Relief Scheme, to provide a discount on wholesale gas and electricity prices for all non-domestic customers – including all businesses, charities, schools and hospitals.
It will apply to energy usage from October 1 to March 31, running for an initial six month period for all non-domestic energy users – and the support will automatically be applied to bills.
Today, we’re stepping in to protect businesses, charities and public sector organisations from record high gas prices.
Just as we’re doing for consumers, this new scheme will keep energy bills down from October to provide additional peace of mind.https://t.co/suiGLY56UF
— Kwasi Kwarteng (@KwasiKwarteng) September 21, 2022
Prime minister Liz Truss said: “I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods.
“As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind.”