Inflation hits small firms: ‘Covid was a walk in the park compared to this’
Notifications arrive every day at Loveone, an Ipswich gift shop, heralding price increases of 5% to 10% on products it sells, usually adding a couple of pounds to the sticker price.
“If I don’t get my orders in by a certain date then I will have to pay more,” says Cathy Frost, who has run the shop for 15 years. “I can kind of hold my prices for the moment as I ordered stock six months ago, but if the things I’m ordering now are going to be more expensive, I’m asking: ‘Will people pay more?’”
Frost is already worrying about Christmas. Retailers can have six-month lead times to ensure they have the right products for their most important season. “I’m wondering, if this cost of living crisis is really going to be felt in October, will people be spending at Christmas?” she says. “I don’t know if people will spend £30 for a candle when last Christmas they did.”
Footfall in Ipswich is down, which Frost blames on people having less money to spend and also the number of people working from home. Small businesses are not protected by an energy price cap, and so can be left exposed. Frost turned off the heating weeks ago to cut bills. Meanwhile part-time staff costs have also increased, taking away further from the bottom line.
“I’ve been here 15 years and went through Covid but that felt like a bit of a walk in the park compared to this,” Frost says. “We knew we were in lockdown and that we would come out.”
Ben Hancock is the managing director of Oscar Acoustics in Kent, which makes and installs acoustic sound-proofing for interiors. Inflation is delivering a series of challenges just as the £4.5m-turnover company is planning an expansion, adding another building.
It will carry on with the investment, although Hancock says some
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