A growing number of business owners in Torry, Aberdeen, are worried about their own futures after the closure of local shops amid soaring energy costs.
Some voiced their concerns during a meeting at the Grampian Bar on Victoria Road.
It was generally agreed there is a need for urgent action to stop a domino effect in its tracks.
Is it time for an energy price cap for smaller firms?
There was strong support for the introduction of an energy price cap for smaller businesses, similar to the one which is meant to protect households from rocketing fuel bills.
And most of those attending the meeting favoured the return of measures similar to those introduced in response to the Covid-19 outbreak.
Another suggestion was for a community fund to be set up, supported by energy companies.
It is heartbreaking when you see how much it is destroying the community.”
Kim Main, leaseholder, Grampian Bar.
The gathering was arranged following the closure of two businesses in quick succession.
The Royal Crown Chinese takeaway, owned by Martin Tang, shut after its gas bill rose from £1,000 to more than £10,000 per quarter in just a few months.
The family-owned business survived nearly 50 years until the current cost-of-living crisis made it unviable.
Nom Nom Fudge, on Victoria Road, has also closed after selling homemade chocolate fudge, ice cream and retro sweets to customers since August 2018.
Owner Douglas Hall said his “heartbreaking” decision to shut Nom Nom was made after a 200% increase in electricity costs, with a further rises of up to 40% expected in October and January.
Meanwhile, a local Spar shop, on the corner of Victoria Road and Mansefield Road, is believed to be on the brink of closure.
And the elderly owner of the much-loved Torry Chip Bar on Victoria Road is minded to retire when his current energy contract ends in a few months.
More to follow?
Judging by the mood at the Grampian Bar, more businesses in Torry could soon be forced to shut their doors.
Grampian Bar leaseholder Kim Main said her business was OK for now but the toll of the cost-of-living crisis is hurting her customers.
People are spending less time and money in the pub because of the squeeze on household budgets, she added.
The business is also having to shoulder its own sharp rise in costs, including for TV sports channels – which are vital for pulling in punters.
“Sky, BT – it’s everything,” Ms Main said, adding: “I’m lucky enough at the moment that I’m on a fixed rate contract for my gas and electricity but that runs out in May, so what happens to me after that?
“I am noticing a difference in the customers coming in. I’ve put my happy house prices back in (after they were ditched as part of the pub’s cost-cutting) to keep the customers I’ve got. Getting people in your doors now is horrendous. Everyone is the same – they’ve got less money.”
Pub’s costs up £3,500 a month
The Grampian Bar is shelling out about £3,500 more in costs every month, which Ms Main said highlighted the current plight of many small businesses in Torry and beyond.
She added: “It is heartbreaking when you see how much it is destroying the community.”
Newer businesses are finding it tough too, said Hannah Morrison, of Sharon Gill Dance Academy, which opened in a converted bar less than a year ago.
We’re seeing it (the cost-of-living crisis) from both sides of the economy.”
Hannah Morrison, Sharon Gill Dance Academy.
Ms Morrison said: “We’re a relatively new business in the area, offering opportunities for children from the age of 18 months right up to young adults.
“We’re seeing it (the cost-of-living crisis) from both sides of the economy, both in our rising costs and being able to offer these classes but also with everyone else’s costs going up.”
Some people are undoubtedly finding it hard to be able to afford dance classes, either for themselves or their children as fast-rising costs take their toll, she said.
Mr Tang, who shut his Crombie Street takeaway “for the foreseeable future” earlier this month, said he was still trying to find ways to make his 20-year-old business viable.
It is estimated he would need to sell an extra 1,524 extra meals per quarter just to break even.
He said his combined gas and electricity bills would still come in at more than £5,000 per quarter, despite supplier SSE agreeing to slash its charges.
The government really needs to step in and do something right now.”
Martin Tang, the Royal Crown, Torry.
Mr Tang added: “There is no way my business can support that kind of energy bill. We do have reasonable turnover but not enough to support that.
Other rising costs make the situation untenable, he said, adding: “It’s not just me and this community – you see it across the nation.
“Most of these people I know who own Chinese takeaways – they are small family-run businesses.
“They have a turnover to support their family and maybe one or two workers but they don’t have a great deal of volume to support these kind of energy bills.
“The government really needs to step in and do something right now, or what you are going to see will be like a domino effect – this one shuts, then the next one shuts.”
Further increases coming this autumn and in January will be “the final nail to finish us off”, he warned.
The meeting was organised by Royal Crown employee Natalie Hood and The Press and Journal.
Aberdeen South and North Kincardine SNP MSP Audrey Nicoll and Torry and Ferryhill councillor Christian Allard, also SNP, were both there.
Ms Nicoll, a former Torry councillor, said: “We saw a call to action more or less immediately when we knew we were facing a pandemic.
“The issue we have at the moment is there there is a potential for lag effect.
“We are going to start seeing our bills go up as we turn on our heating in the winter but we are also going to see people coming to the end of their current contracts which are possibly manageable and affordable – but that is about to change for a lot of people.”
Mr Allard said rising costs were not the only challenge facing small businesses, with many also struggling to keep afloat in the face of post-Brexit staffing shortages.
He added it would be no surprise to see many more businesses folding, including some that have provided vital support during the Covid pandemic.
The community role played during times of hardship by these businesses is under threat in the current crisis, the councillor said, adding: “That great help is going to be taken away.”
David Groundwater of the Federation of Small Businesses (FSB) said: “Unfortunately, we’ve seen a growing number of north-east businesses facing astronomical rises in their fuel bills, with tough decisions now being taken in a bid to cut costs and even closure.
“This can mean reducing hours, withdrawing services and in the most extreme cases looking at bringing up prices.
“FSB across Scotland and the UK have been urging governments in Edinburgh and London to introduce measures to help ease the spiral of what appears to be never-ending costs increases.
“Unlike the protection offered to domestic customers, there is no price cap for small businesses and no financial help when they can’t afford to pay.”
Mr Groundwater added: “In a single year of the pandemic we lost nearly 20,000 Scottish businesses and if we are to stop that decline and protect existing businesses, we need urgent action.
“Like much of the support provided over Covid, speed is of the essence.
“We’ve been saying for months there are interventions governments can make now to help ease the burden.”
We’ve seen a growing number of north-east businesses facing astronomical rises in their fuel bills, with tough decisions now being taken in a bid to cut costs and even closure.”
David Groundwater, business development manager, Federation of Small Businesses.
He said these measures could include reversing the recent rises in National Insurance contributions, cutting VAT on energy bills, cutting fuel duty or offering struggling small businesses the same level of protection as domestic customers.
Mr Groundwater continued: “In this cost-of-doing business crisis we must ensure that any remaining unspent Covid funds, regardless of which pot they might sit across local authorities and governments, are gathered in and repurposed as soon as possible before we see yet more closures.”
The UK Treasury is reportedly considering a package of proposals for the next prime minister that could include the option of repurposing Covid schemes to help businesses ride out the energy crisis.
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