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Inflation hits 9.1% – “Inflation is pummelling us” – reaction from small businesses around the UK

Arrow to signal inflation

Following today’s news from the ONS that inflation has hit 9.1%, small businesses from around the UK have given comment.

Ollie Hayes, a former professional rugby player, personal trainer and founder of So Fit Bath“Inflation is pummelling us and it feels like the Government and Bank of England are just watching from the stands. For millions of small businesses, it’s more brutal now than it was during the pandemic but policymakers and the people running this country are all out of ideas. The economy is entering a dark place.”

Nikki Collier, owner at Sudbury-based childrenswear company, BiNibabies: “I’ve seen a 60% drop in both online and footfall sales and inflation is almost certainly the cause. At this rate, I will not survive another two months. I’ve survived COVID to now be hit with this, which is far worse. Sometimes I wonder what is the point for us little shops. Everyone says shop local but too many local shops can’t compete with the big brands, who can afford to lower their prices to reel customers in.”

Maryann Penfold, owner of Worthing-based artisan hot chilli sauce maker, Boom Sauce: “Inflation is destroying small businesses by the day. I am genuinely worried about the future of my own business as customers are spending much less. I cannot increase my prices as that risks losing customers and equally I cannot reduce them as the cost of ingredients has shot up. Many small artisan producers like me are in a Catch-22 situation. Lowering prices when raw material costs are skyrocketing just isn’t viable.”

Dave Kelly, co-founder of Bristol-based butcher, Ruby & White: “For us, the cost of fuel for deliveries and collections is borderline obscene, and there have also been phenomenal increases in the price of feed and fertiliser. All this makes putting meat on the counter a lot more expensive but we’re doing our best to take the hit as much as we can to keep things affordable for our customers. Fortunately, sales for us are still holding up for now as a cut of meat from a butcher and a bottle of wine from the supermarket are still significantly cheaper than eating out in a restaurant. Companies in all sectors are being put through the grinder and the Government is doing nowhere near enough. The UK economy is on red alert.”

Dr Jackie Mulligan, expert on the Government’s High Streets Task Force and founder of the local shopping platform, Shopappy“Millions of families and small high street businesses are in an unimaginably difficult place. This terrifying level of inflation is a double whammy for the family businesses that line the UK’s high streets. They’re being hit in the tills and in their own pockets at the exact same time. For now, many are resisting raising prices but at some point something will have to give. Our message to consumers is, if you have less to spend, spend it wisely, not with the online giants but with the local businesses that are the bedrock of your communities. Right now, they are depending on your custom more than ever.”

Monique Oliver, owner of Monique Oliver Art & Design: “Inflation is battering small businesses. For the past two years, I’ve been hanging onto my business by my fingernails and it’s emotionally draining, and now we have inflation at 9.1% and expected to go into double digits. I genuinely fear for the future. This will be my last year in business unless things turn a corner soon.”

Taryn Lee Johnston, owner of Lincoln-based independent publisher, The FCM Group: “As an independent publisher, printing and distribution costs have risen significantly. However, the cost of a book has not risen and, mainly due to Amazon, small publishers are being priced out of the market. Because they are able to buy in bulk from outside the UK, the larger publishing houses are able to sell at lower prices as they pay less for each printed copy. Independents such as myself are struggling to make money for ourselves and our authors. It also means that bookstores are only selling titles that they have a guarantee will sell, like celebrity-written books. It’s a cultural as much as a financial blow.”

Julia Usher, Managing Director at Burton-on-Trent-based Ashes Memorial Jewellery: “As a small manufacturing and ecommerce jewellery business, I am deeply concerned about the rise in inflation. The past three months have been the toughest in our company’s history. In April, sales plummeted by 35% and in May they where flat and June is currently down by 52%. I have been in the retail jewellery industry for 20 years and I have never been more anxious about the economic situation we currently find ourselves in. With rising inflation, the cost of living crisis and consumer confidence being at an all-time low, we are on course for a retail apocalypse if the Government doesn’t step in. For my business, sales are far worse now than they were in the pandemic.

“To try and increase sales we have had to offer more discounts, promotions and develop and craft cheaper products. This of course is not sustainable. With rising business costs and the ever-increasing gold price, we are been squeezed hard from all directions. The government is not doing anywhere near enough to support SMEs during this time of economic uncertainty. They need to act now and reduce VAT to 5% like they did for the hospitality industry during the pandemic. Without immediate action from the Government, the rise in inflation will be the final nail in the coffin of the High Street and many small e-commerce retailers.”

Jamie Rackham, founder of UK Facebook group, Not on Amazon, which has 194k small independent makers as members: “Inflation hitting 9.1% is absolutely devastating to millions of people and small independent businesses. Its impact is the most common theme in our group. The Government is doing nowhere near enough to support working people, but at the same time it lets giant corporations avoid paying the taxes they should. Many of our members feel totally abandoned, with prices of raw materials, energy and their own living costs rising at an unprecedented rate. In the meantime, big businesses, which can afford to slash their prices, get bigger and the small independents are squeezed like never before. We need action and we need it now.”

Gillian Colley, designer at Peterborough-based jeweller, Paper2Pearls: “As a person living with a disability, inflation is causing me sleepless nights, every night. I know many others are experiencing the same thing. Fuel and energy bill rises are the worst, as I need to keep my house warm and I am also dependent on my car. Almost everything costs more. The Government is displaying a complete lack of empathy and understanding of how the current financial crisis is affecting ordinary people. My online sales are down as buying jewellery is a treat rather than a necessity.”

Ed Rimmer, CEO of Bath-based SME finance provider, Time Finance: Each new day brings a new challenge for small businesses. Rising utility costs, supply chain issues and increased tax bills have created a perfect storm that in many cases means a company’s current outgoings far outweigh their income. That simply isn’t sustainable and with the rising rate of inflation, the future for some businesses will hang in the balance. The financial challenges for business are twofold: they must manage the cost of doing business while somehow increasing their wage bills to help the workforce with the rising cost of living.

“That’s a tall order and the line must be drawn somewhere to help SMEs manage these challenges. The Government simply isn’t doing enough. In our most recent survey, businesses said they were impacted most by the rising cost of supplier materials and stock, and energy costs. Both will be made worse by the rising rate of inflation and both pose a great threat to our economic productivity. Once again, we must remind the Government that the Autumn Statement is too far away to wait for more support for small businesses. They need it now.”

Lewis Shaw, founder of Mansfield-based Shaw Financial Services: “Neither the Bank of England nor the Government seems to have a plan, strategy or coherent policy for the worst cost of living crisis facing Brits for more than a generation. Instead, we’ve got a Tory government saying one thing yet doing the opposite. They want to build a high-wage, high-skill, low-tax economy, seemingly forgetting they’ve been in charge for the past 12 years. Yet, at the same time, we’ve got one of the highest tax burdens since WW2, a skills gap, collapsing growth and declining living standards. If someone doesn’t get a grip of this soon, we’re in for a world of pain. The only thing going down is the money in people’s pockets, yet we’ve got politicians and the governor of the Bank of England saying there must be wage restraint. It’s difficult to know what level of reality they’re operating in.”

Adam Bamford, director of Derby-based corporate gift firm, Colleague Box: “We haven’t seen anything meaningful from the Government during this unprecedented time. It appears that the Chancellor is burying is head in the sand and hoping for the best as he knows the biggest and best will undoubtably survive, with the lower rates of tax and handouts that seem to flow for larger businesses, but for us little guys it has become a hand to mouth business that has one business goal: survival. I want nothing more than to give all of our employees a pay rise but supplier cost increases means we have little in reserves to offer out so are compensating where we can with more time off for same pay, passing on wholesale discounts to help with shopping bills and trying to allow home working to save on fuel but being a warehouse this isn’t possible very often. We’d very much welcome more help but we’ll keep on fighting and doing things our own way until it comes.”

Kate Ashwell, owner of Bristol-based vintage clothes retailer, Ashwell & Co: “Inflation is destroying our business. There has been a drastic drop in our sales and bookings over the past month or so. Having fought our way through the pandemic, it’s incredibly deflating. We are absolutely exhausted and our emotional and financial resources are low. The financial crisis we’re in is yet another thing small businesses are having to face, but this time there is no help from the Government. The current situation is potentially far more damaging longer term for our business. The Government needs to do more to ease the pressures on household incomes and ensure the economy starts moving again otherwise many small businesses, like ours, won’t make it through.”

Siobhian Raymond, owner at South London-based micro pottery, Pale & Interesting: “Rising inflation is having a massive effect on our daily lives. I find myself panicking about the price of food. Our money isn’t lasting nearly as long as it needs to. I’ve noticed a significant loss in customers over the past few months. Being self-employed and running a small business is scary, and I literally have to work from the moment I wake up, until I go to bed, in the hope that I can generate sales that will provide for my family. The government is doing nowhere near enough for lower income homes and small businesses. The rich are getting richer and the poor, poorer. I don’t see how working class people and small businesses will survive if things carry on the way that they’re going. I’m genuinely worried for my children’s futures.”

Jenny Blyth, owner of London-based Storm In A Teacup Gifts: Every other day, without fail, I find myself empathising with customers about how hard they are finding life. How they are struggling to buy petrol, how scared they feel. I always strive to find a way to help someone whether that’s a payment plan so they can buy their loved one a gift or anxiety advice from someone who has been through it. Not only is the government not helping us in a financial way, they are effectively sponsoring the mental health crisis we find ourselves in. Shame on you, Mr Johnson.”

Stewart Morton-Collings, owner at For Me and For You Designs: “We’re a small family business and have weathered many storms over the past 10 years but the current situation is unlike anything we’ve ever seen. By the end of this year, our energy costs at home and in the business will be bigger than our mortgage and rent for our workshop, while raw material costs have shot up. At the moment, we’re not sure where this additional money will come from. Our food bills have gone through the roof so we’ve started to use charities who distribute out of date food. We walk or cycle as a family, cutting down our use of our car and van. We’ve drastically reduced our energy consumption, but all these measures won’t be enough to get us through. Our only option is to work seven days a week, every week, with no breaks. Holidays, gifts, treats for the kids have all been forgotten. It feels like we’ve gone backwards 50 years.”

Abby Avery, owner at Aylesbury-based children’s retailer, Little Moonbeam: “My target market is young families, and with a young family myself, I know exactly how impossible the cost of living crisis is. The way in which bills are rising feels absolutely suffocating. It’s daunting to open letters that notify us of yet another price hike. As a business, our suppliers are increasing their prices and and I am desperately trying to absorb them. Mums, who are my customers, need to think about the necessities and are struggling to put food on the table so small businesses like mine are seen as an unachievable luxury.”

Natalie Fletcher, owner of Manchester-based micro manufacturer, Mancmade: “As a small business owner and single parent, inflation is putting an unbelievable pressure on me. I am the sole earner and the fact consumers have less disposable income to spend is devastating. With fuel and energy costs at record highs, my business is taking a beating, especially as I work from home and provide mobile services. I’ve had to limit the amount of deliveries I provide due to mega-high fuel costs. This government is doing nowhere near enough to support people and small businesses during the current financial crisis. All they are doing is putting more pressure on businesses, many of which were only born during the pandemic.”

Peter Rackley, a Ramsgate-based artist: “It’s an extremely worrying time for every family right now with inflation where it is. With the cost of everything increasing, I am concerned I might struggle to maintain an income. The impact this could have on my household would be devastating. As a self-employed person, I worry about the impact inflation will have on my business. Being completely reliant on selling art, I am already feeling the effects of people having less money to spend, or even just not wanting to buy things like art when they are worried about having enough food in their cupboards or their heating on.”

Frederick Phillips, of Frederick Phillips Art: “Everything is increasing in price, from our rent, storage unit, energy costs, telephone, broadband, mailing and shipping costs, food and last, but by no means least, art materials and printing services. As artists, we can always tell when the economy is going to take a nose-dive because sales quickly slow down. After all, who is going to prioritise spending money on art when they need food on the table or extra money to heat their homes? However, in the past, we have known that once a recession passes, sales return. This time around, though, following Covid and now with a war in Europe, it may be a long while before things stabilise. We continue to make sales for now as we have collectors all over the world, but who knows what the near future holds?”

Amanda Rutland, founder of Colchester-based Gorgeous Gourds“The walls really are closing in. I don’t want to up my prices because of the cost of living squeeze, but how can we small businesses not? We are being hit from every angle, in stereo. Meanwhile, the ‘big boy’ corporations continue to thrive as they can lower their prices and take the hit. The whole economy feels fundamentally broken.”

Seena Gosrani, owner of London-based jeweller, Bottlebee: “Inflation at this extraordinary level is really hitting my business hard. The price of gold and silver have skyrocketed and I will have to increase my prices to keep in line with increasing supplier costs. The competition in this sector is fierce and a lot of people are selling as a hobby rather than a business so it’s hard to compete. Jewellery is not a need, it’s a want, and as inflation increases, people will look to buy mass-produced items rather than something that is handmade and unique to them.”

Zaleika Bratchley, owner of Zaleika Anna Jewellery: “Soaring inflation means that we are only just able to cover all our household bills and keep our heads above water. This also means any unexpected expense like an emergency dental appointment or car breakdown would most likely have to be paid by credit card. I am a self-employed jeweller and many of the materials I need to make my products, along with packaging, postage and promotional costs, have shot up in price. This means a choice between raising my prices and possibly pricing myself out of the market or swallowing the costs and making less profit. If the cost of living keeps rising and wages don’t keep up, I don’t know how much longer I will be able to operate as a small business.”

Dalia Hawley, skincare manufacturer at Dalia Botanique: “Inflation is exactly the blow small businesses didn’t need after two years of the pandemic. The prices of ingredients have started to rise and will continue to do so. This is incredibly difficult since, as a new business, I will eventually have to pass on costs to the consumer. I will have to up my prices and try and spread them across all my products. My new range is cold-processed, which at least means I won’t need to use as much electricity to produce my cosmetics. I’m worried as people, including myself, are understandably trying to spend less and save money and my products may now be seen more as luxury items than necessary purchases.”

Frederick Phillips, of Frederick Phillips Art: “Everything is increasing in price, from our rent, storage unit, energy costs, telephone, broadband, mailing and shipping costs, food and last, but by no means least, art materials and printing services. As artists, we can always tell when the economy is going to take a nose-dive because sales quickly slow down. After all, who is going to prioritise spending money on art when they need food on the table or extra money to heat their homes? However, in the past, we have known that once a recession passes, sales return. This time around, though, following Covid and now with a war in Europe, it may be a long while before things stabilise. We continue to make sales for now as we have collectors all over the world, but who knows what the near future holds?”

Friday Lawrence at Forest of Dean-based Friday Lawrence Silverware“The economy is in a state and inflation is out of control. The inflationary pressure on small businesses is proving unbearable for many and there’s no guarantee raising interest rates will alleviate it. The Government should be focused on supporting small businesses and households who are under a massive strain. Instead, billion pound companies announce huge profits and avoid tax.”

Claire Tasker, founder of Hitchin (Herts)-based Claire Tasker Jewellery: “It’s an extremely worrying time for small business owners right now. People are already having to make decisions on what to cut back on because of the cost of living crisis and the fact they’re struggling to make ends meet. As well as this, the cost of raw materials and tools have continued to rise sharply for me since the start of Brexit. I really don’t want to have to raise my prices but, long term, my current prices just aren’t sustainable. I’m finding it very stressful to try and predict what will happen. Sales have fluctuated during the past two years due to the pandemic and now the cost of living crisis is amplifying the challenges people like me face.”

Ruth Bradford of Bristol-based The Little Black and White Book Project“With each day that passes, my concern about inflation and the economy is growing as people simply aren’t spending. As a consumer I totally get it, it’s not pretty out there, but as a business owner it feels like I’m on borrowed time. All I can do is hope that the website traffic I am seeing does come back and convert at some point as people still seem to be largely browsing. It’s just so hard to predict anything right now and I can’t help feeling it’s just going to get worse.”

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