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Photograph: Steve Beech / Jam House / Polo Bar

‘Sleepwalking into a disaster’: how four small UK businesses are coping with rising energy costs

More than half of venues are worried that soaring bills could lead to closure

Chiara Wilkinson
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Chiara Wilkinson
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With spiralling energy bills and inflation at a 40-year high, everyone’s feeling the squeeze right now. British households are bracing for the worst, following news that energy bills could reach £500 a month in January, and thousands have now signed up to the Don’t Pay UK campaign. But the UK’s small independent businesses – many of which were hit hardest during the pandemic – are also under pressure, with many owners facing tough choices to make ends meet.

A survey of more than 1,000 UK small businesses recently found that 54 percent of SMEs were concerned that high bills could lead to closure this year. Your charming local pub? The delightful greasy spoon that has seen you through the worst of hangovers? That sticky-floored music venue where you saw your first-ever gig? Chances are, they’re probably all worried – and it sucks. It’s these businesses that make our communities what they are, not our local Pret or Nando’s.  

It’s not only energy bills venues are concerned about. There’s also been a rise in the cost of raw materials, strains on supply chains thanks to Brexit and a mounting pressure to increase wages in response to high inflation. Now, many business owners are calling on the UK government to intervene and help to prevent a ‘total collapse’ of the workforce, anticipating that the worst is yet to come. With the prospect of a long, hard winter ahead, we speak to four small business owners from different parts of the UK about how they’re coping with rising energy costs. 

The brewery

Someone brewing beer
Photograph: Matt Austin

‘My husband and I co-founded our independent brewery in 2014, making and supplying session craft beer to pubs and restaurants across Devon. Over the last six months, our energy costs have pretty much doubled, rising by about £20,000 for the year. We don’t have any protection in place, and I’m worried. We increased our prices slightly at the start of the year, and we’ll probably have to put them up again in the autumn. 

‘But you have to be very careful. The proof is there that people still will drink in down times, but you have to be cautious about where the price of a pint is. If we have to keep putting ours up, that could easily price us out of the market. It’s incredibly concerning: it feels like the whole country is sleepwalking into a disaster.’

–Jess Magill, co-founder of Powderkeg Beer, Devon

The wellness centre

‘I run a wellness and massage clinic in West Lothian, Scotland. We do massages, yoga classes, and recently added floatation therapy. Over the last six months, energy costs have skyrocketed and our revenue has taken a tanking. I’ve been sacrificing my own salary and have worked as many hours as I can to make sure the business stays afloat. I’m scared. We haven’t been able to offer a permanent position to our kickstart-scheme employees, which was originally the plan. I’m also not sure if we’ll be able to keep running the floatation tank. 

‘Being a close-contact service, we were one of the last to reopen after lockdown eased. Now, with the cost of energy hitting our customers and us being considered a luxury service, we’re the first to go. Members have had to cancel and one-off clients have dropped off the face of the earth. If things don’t change, there’s a possibility we’re going to have to really consider whether the business is sustainable or not.’

–Sally Chamness, owner of Phoenix Wellness, Bathgate 

The music venue 

Inside the jam house
Photograph: Picasa

‘I’ve been manager at the Jam House in Birmingham for more than 20 years. We’re a live music venue on the outskirts of the city centre and are well known in the community. Our energy costs used to be something to consider, but they were way down in the list of priorities. That’s completely changed.

‘And it’s not just energy. As well as gigs, we have bars, a dance floor and a restaurant – our food costs are increasing by 30 percent, and in some cases more. Christmas bookings are looking fine at the moment, but who knows what’s going to happen next? It feels like there’s very little we can do. To get through this, we’re going to need absolute support from the community – we’ll need everyone to come and fill the venue every night.’

—John Bunce, general manager of The Jam House, Birmingham 

The café

‘I manage a 24-hour café and bar serving up traditional British food, and have been open opposite Liverpool Street Station since the 1950s. Being open round the clock, we need equipment on all of the time. Over the last six months, our monthly costs for energy have gone up by about £1,000, despite our usage being lower than normal. 

‘I’ve put some prices up, like adding 50p on fish and chips. But I feel like we’ve reached the point where we have to be careful. I’m feeling the pinch, my customers are feeling the pinch — it’s a double whammy. This post-covid era has brought on more challenges than I think any of us foresaw. In the worst case scenario, we wouldn’t be able to afford to carry on. I don’t think we’ll get to that stage, I hope there will be some intervention: I employ 54 people and they rely on me to feed their kids and family.’

— Philip Inzani, manager of Polo Bar, London

ICYMI: how three British workers have really found the four-day working week trial.

Plus: this Ukrainian café is providing comfort (and dumplings) to Sheffield’s refugees.

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