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Café owners across Yorkshire are expressing growing concerns about rising business rates and other escalating expenses that are squeezing their profit margins. Many report a noticeable decline in customer footfall, which, combined with these increased costs, is making it difficult for them to maintain affordable prices despite government initiatives like the newly introduced “High Street Strategy.”
Jo Millner, who runs Milliefox Cakes in Huntington, York, shared that her income had fallen by 35% over the past year. She explained, “People just can’t afford to spend anymore so they’re buying smaller items or less of them.” The British Retail Consortium supports this, noting a 4.5% drop in footfall across Yorkshire’s towns and cities in the last quarter of the year compared to the previous one. Meanwhile, Millner described how her operational costs continue to rise significantly. For example, the price of 10 kilograms of chocolate went from £64 to £160 in just 18 months. She explained, “If we put the rising cost of food products and energy and wages and the new national insurance, we’d have to charge £15.84 for a coffee and a cake. So we have to absorb those costs.”
Beyond these expenses, Millner highlighted the inconsistencies in VAT application within hospitality, expressing frustration about the confusing rules. She pointed out, “If I make a chocolate brownie and I give it to somebody to take away in a paper bag, they don’t pay VAT. If they sit in with that brownie, they pay VAT. If I put it in a gift box, they pay VAT. If I cover it in chocolate, they pay VAT. There is no rhyme or reason to it.” This complexity adds an additional layer of difficulty for small businesses trying to navigate financial challenges.
Meanwhile, Rebecca Cook, owner of TeaHee Café in Easingwold, spoke about the increasing business rates her café is facing. She noted that her rateable value is set to increase by a third in April, and criticized the limited scope of government support, urging that all hospitality businesses receive assistance. Cook remarked, “There’s no other way of coping with all the increases that just keep coming. It’s a tightrope-walking situation really. We’re open more often than the pub, during the day when older people are more likely to come out and look for somewhere warm where they can meet friends.”
Paula Gouldthorpe from the Federation of Small Businesses (FSB) warned that the government has largely ignored the needs of local high streets. She expressed concerns about forthcoming closures, reduced staffing, and shortened operating hours among hospitality, retail, and leisure businesses. She said, “Over the course of the next few months, we are very concerned that we’re going to see some increase in closures, reduction in staffing and perhaps some contracted hours of the opening of some of these high street retailers.”
Despite these challenges, some establishments like Mannetti’s in York city centre have experienced success. Marie Milburn, co-owner, said the café had its best year yet since opening just before the pandemic but stressed the hard work involved. “I don’t think people appreciate the amount of work that goes into something like this. It has got to be a passion because you can’t sustain it otherwise,” she added.
Gouldthorpe emphasized that small businesses play a vital role in keeping high streets vibrant. “We have seen business closures of family-run businesses that are 20, 25, 30 years old, that have actually left quite a big hole in their communities,” she said, recognizing that many owners are driven by passion rather than profit. “They do this because they want to provide a service, they want to support their communities, they want to employ people locally, all of these things that actually gets them out of bed and motivates them in the morning.”
While urging businesses facing difficulties to seek support from local authorities or the FSB, Gouldthorpe noted that many funding schemes are set to expire at the end of March. A spokesperson from HM Treasury highlighted the government’s commitment to helping hospitality and high street businesses, stating: “We’re backing hospitality and the high street with a £4.3bn Budget package to cap big bill hikes – stopping bills rising for over half of business properties. Our Plan for Small Business will help SMEs access the tools and support they need to unleash their potential, and later this year we’ll publish a new High Streets Strategy to do even more to back Britain’s high streets.
Read the full article from The BBC here: Read More
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