As cafés across Yorkshire grapple with escalating business expenses and dwindling customer numbers, many owners are voicing their concerns about the sustainability of their businesses. The challenges they face are compounded by recent government measures, which, while well-intentioned, may not sufficiently alleviate the financial pressures on the hospitality sector.
Rising Costs and Reduced Customer Spending
Jo Millner, the proprietor of Milliefox Cakes in Huntington, reported a staggering 35% drop in her takings over the past year. She attributes this decline to a shift in consumer behaviour, whereby customers are opting for smaller purchases as they grapple with their own financial constraints. “People just can’t afford to spend anymore, so they’re buying smaller items or less of them,” Millner stated, reflecting the broader trend affecting many local businesses.
The British Retail Consortium has indicated that foot traffic in Yorkshire’s towns and cities decreased by 4.5% in the three months leading up to December compared to the previous year. This downturn in visitors is coupled with soaring costs for essential supplies. Millner noted that the price of 10kg of chocolate has surged from £64 to £160 in just 18 months, forcing her to reconsider pricing strategies. “If we factor in the rising costs of food, energy, wages, and national insurance, we would need to charge £15.84 for a coffee and a cake,” she explained, underscoring the dilemma faced by many café owners.
VAT Regulations Cause Confusion
The complex VAT regulations in the hospitality sector further complicate matters for café owners. Millner highlighted the inconsistency in tax application: “If I make a chocolate brownie and give it to someone in a paper bag, there’s no VAT. But if they sit in with it, they pay VAT. There’s no rhyme or reason to it.” This unpredictability creates additional challenges for cafés trying to maintain profitability while adhering to tax laws.
Rebecca Cook, who runs TeaHee Café in Easingwold, echoed similar sentiments. Her premises are set to see a 33% increase in rateable value come April, which will escalate her business rates. Cook believes that government support should extend beyond pubs and music venues to encompass all hospitality businesses, as they too are struggling under the weight of rising costs.
Government Support or Insufficient Measures?
Earlier this week, Chancellor Rachel Reeves announced a 15% discount on business rates for pubs and music venues in England, alongside a freeze on rate increases for two years. However, many café owners feel that this measure does not go far enough. Cook described the situation as “tightrope-walking,” emphasising the need for broader government assistance to help businesses like hers survive the ongoing financial strain.
Paula Gouldthorpe from the Federation of Small Businesses (FSB) expressed concern that the government has “repeatedly ignored the needs of our high streets.” She stated that confidence among hospitality and retail businesses is at a low, warning of potential closures and reduced working hours in the coming months.
Despite the challenges, some businesses, like Mannetti’s in York, have reported success. Co-owner Marie Milburn noted that their achievements stem from the relentless dedication of her family, who constantly manage the café. “It has got to be a passion because you can’t sustain it otherwise,” she remarked, highlighting the personal sacrifices small business owners often make.
The Call for Comprehensive Support
The FSB’s Gouldthorpe emphasised that small businesses are the lifeblood of our high streets. “We have seen closures of family-run businesses that have been part of the community for decades, leaving significant gaps,” she lamented. Many owners are driven not just by profit, but by a desire to serve their communities and create local employment opportunities.
With various funding schemes set to conclude at the end of March, businesses are urged to reach out to local authorities or the FSB for support. A spokesperson for HM Treasury reiterated the government’s commitment to the hospitality sector, highlighting a £4.3 billion budget package aimed at limiting bill increases for over half of business properties. They promised further initiatives to strengthen high streets later this year.
Why it Matters
The ongoing struggles faced by café owners in Yorkshire are indicative of a broader crisis affecting the hospitality industry. As footfall declines and costs rise, the survival of local businesses hangs in the balance. The government’s efforts to support the sector must be comprehensive and inclusive, addressing the unique challenges faced by all hospitality establishments. Without decisive action, the vibrant tapestry of local cafés and eateries, which contribute so significantly to community life, may begin to unravel.
