FRONTING UP TO THE COST OF LIVING CRISIS
Three café owners discuss what it's been like tackling the latest in a long line of tough challenges
We've all been feeling the pinch of late, but how is the current cost of living crisis impacting the day-to-day lives of cafés and their owners?
Well that's exactly what we wanted to find out. We decided to reach out to three Matthew Algie customers to get the word straight from the horses mouth.
Andrew Morton - Hope Community Café
The Hope Community Café in Grantham has been better able than most to absorb the pressures of the current cost of living crisis, as Andrew Morton, manager at the Hope Community Café, tells us.
"As I'm sure is the case with most cafés out there, the main challenge we are facing at the moment is trying to find ways to not pass our rise in costs straight onto the customer.
"We are in somewhat of a unique position. The café is an initiative of Earlesfield Community Church, and our focus is on community outreach, not on making profit. We want to have as many people visiting the café as possible, and to do so we need to keep our prices low.
"We've had to be strategic with our price increases. Some of the items on our menu haven't seen a price change in years. We've had to raise our cake prices by 50% (£1.00 to £1.50). Now on the face of it, a 50% price increase doesn't sound good at all, but we're still only charging £1.50. We want to continue to offer our customers and our community value for money, but we have to be realistic with what is happening."
“We want to continue to offer our customers value for money, but we have to be realistic with what is happening.” Andrew
With a commitment to paying its staff a fair wage, a desire to provide work experience for young people, rising supply costs and larger energy bills looming ever larger in the rear view mirror, would Andrew's customers be understanding of the steps he's been forced to take?
"Thankfully our customers have been very understanding of the price increases we've been forced into making. They know that we are only doing what is necessary to keep the café running as a viable enterprise.
"The nature of our business leaves us in a rather fortunate position. We are able to keep our prices at a significantly lower level when compared to most of the larger, café chains because we aren't driven by making money. As a result, we haven't seen that much of an impact on footfall. In fact, we had one of record days only a few weeks ago.
"If the trend of rising costs continues over the next six months, we're confident we can weather any storm. If it's a much longer term crisis, however, then it could lead to us into making some very difficult decisions."
Sarah Bunn - Cakes, Coffee & Cutters
“The recent rise in costs has led me to making the hardest business decision of all.” Sarah
In a norther suburb of Newcastle lies Cakes, Coffee and Cutters. What once began life as a speciality cakemaker and cake decorating supplies store has had to change its very nature to, "keep afloat," as owner Sarah Bunn explains.
"We originally set the business up as a speciality, celebration cake shop that also sold cake decorating supplies. As lockdown struck, all celebrations were cancelled, plus as a non-essential shop, we had no choice but to temporarily close our doors. We had to adapt if we were going to make it through COVID and the pressures it brought about.
"In our area in Gosforth there wasn't really any coffee shops or takeaway coffee facilities. We, therefore, decided to make use of a government grant we had received to refit our store into part coffee shop/part cake decorating store. That decision really paid off. We became very busy during lockdown as a result of the changes.
"As restrictions began to lift and people could gather again, we saw our cake orders soar. We were booked almost two years in advance due the backlog of weddings, christenings and other important events that people wanted cakes made for. Now that might sound like a dream scenario, but the profit margin on cake decorating is frankly appalling, and has only gotten worse of late. This is largely down to the time involved in creating a high-quality, bespoke cakes and our inability to compete with larger online outlets that can deal in bulk.
"Although the coffee side of the business is not not quite as busy as it once was during lockdown, it is still proving to be successful and we've decided to focus all of our efforts on that going forward."
Image Credit: @newgirlintoon
"The cost of living crisis undoubtedly accelerated the process of us having to completely alter the nature of our business. Although we have rising staffing, supply and energy costs, we are trying to absorb as much of these as possible.
"Unfortunately, we have had to increase some of our prices, but our customers have been very understanding of the position we are in.
"The recent rise in costs has led me to making the hardest business decision of all. I'm sad that we've had to give up on the cake side things as it was a real passion of mine.
"Having said that, I also love having the coffee shop. I love the fact that I am meeting the local people a lot more often and having more regular interactions with them. It's been really nice and I'm looking forward to what comes next for us."
Paul Basnett - Hideout & Riposo
Paul Basnett, Director of Live To Eat Liverpool, operates two venues, Hideout in Wigan is a continental style café bar offering a little bit of everything, while Riposo is located within the vibrant FACT building in Liverpool. As Paul describes, it's a combination of factors and culmination of some very tough times that have made the current cost of living so incredibly challenging.
"Small business owners have had a torrid time over the last few years, and spiralling costs are just the latest in a long list of challenges we've had to tackle head-on. I think a lot of café owners at this point just feel battered. It's been a really hard few years, and a lot of cafés, restaurants and bars are still dealing with the impacts of COVID and lockdowns. Now, to see our costs soar is yet another large setback.
"Plus, almost all of the issues over the last few years have been out of our control, so you can't help but feel like the wind is constantly being knocked out of your sails. It almost feels like you can't plan for the future, as in the back of your mind you're thinking, 'what massive obstacle is waiting for us around the corner'."
“Small business owners have had a torrid time over the last few years, and spiralling costs are just the latest in a long list challenges.” Paul
"We're fully aware of the fact that our customers have less money in their pockets, but we've been left with no choice but to increase some of our prices. We've tried to keep them low for as long as possible, however, with rising energy, supplier and staffing costs we didn't really have anywhere else to turn.
"I think because of the nature and scale of this crisis, our customers understand the position independent retailers are in.
"Although we see return customers who have made the decision to come in and spend money with us, it's noticeable that the regulars are coming in less regularly and there are fewer new customers.
"My take on it is that when people have less disposable income, they are perhaps less willing to take a risk. They are perhaps more likely to visit a coffee or restaurant chain, as they know what they will be getting. The experience and quality might not be as good, but your expectations are lower and therefore there is less risk than visiting a new, independently owned place for the first time.
"I'm sure most café, restaurant or bar owners would agree with me that the biggest challenge we face right now isn't increasing our profit margins, it's to simply remain in business. It's been a long few years of incredible tough challenges, and we still have more to face."
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