...By Lola Smith for TDPel Media.
Shopkeepers across the UK are expressing concerns about potential shortages of ice cream and cold drinks this summer as they face the difficult decision of turning off fridges and freezers due to soaring energy bills.
Independent retailers, already burdened by high expenses, find themselves at a breaking point after the government withdrew their support to manage the increasing costs of energy bills, according to Retail Express magazine.
Energy Bill Relief Scheme Fails to Extend Support, Putting Businesses at Risk
Last year, eligible businesses were given a lifeline through the Energy Bill Relief Scheme, which offered them a discount on wholesale gas and electricity prices from October to March.
Leading up to the program’s cutoff date, it was clear that the absence of an extension would put approximately 7,000 stores at risk of closure.
Store Owners Struggle with Soaring Bills and the Dilemma of Keeping Operations Running
As a result, numerous store owners have voiced their concerns to Retail Express, revealing that their monthly bills have skyrocketed by over £2,000.
Ruhail Shahazad, owner of Tremorfa Superstore in Cardiff, expressed his uncertainty about the future of his business in the absence of further assistance.
With bills that previously averaged £800 per month, Shahazad now faces bills of £4,700 without any support.
Overwhelmed, he lamented the financial strain, saying, “There must be more help.
Retailers feel suicidal.
I’ve spent decades building up my business, and now when I look at my wife and kids, all I can think of is increasing bills.”
Desperate Measures to Cut Costs, Leading to Loss of Customers
In an attempt to reduce costs, Shahazad resorted to turning off half of the fridges and freezers in his store. However, this decision comes at a cost.
With the summer months approaching, customers expect chilled drinks and ice creams, resulting in Shahazad losing customers who seek these items.
Meanwhile, David Lomas, owner of Lomas News, finds himself in a fixed contract with his supplier until December.
Despite wholesale energy costs dropping significantly, he continues to be charged 62p per KWh for electricity, whereas current rates stand around 33p.
Frustrated, Lomas insists that the Energy Minister should compel energy companies to renegotiate fixed contracts based on current prices.
Lomas’s energy bills have nearly tripled to £400 per month for electricity, but he managed to lower them by switching to LED lighting and turning off a chest freezer.
Nonetheless, he remains angered by the situation.
Thousands of Independent Convenience Stores Struggle with Excessive Fixed Contracts
The Association of Convenience Stores estimates that around 6,900 independent convenience stores find themselves trapped in excessive fixed contracts.
With rates reaching up to 95p per KWh for an average convenience store, the resulting energy bills exceed £75,000 per year, compared to £20,000 in 2021.
The ACS emphasizes the need for energy companies to allow businesses to renegotiate their contracts or provide alternative solutions to alleviate the mounting pressure.
Additionally, they call on the government to support local shops by introducing tax and investment incentives, such as reliefs, discounts, or vouchers.
These measures would enable convenience retailers to invest in energy-saving initiatives and reduce their carbon footprint.
Energy Consultant Highlights the Widespread Impact on Retailers and Communities
Energy consultant John Lyonds reveals that he has been contacted by a retailer who now faces monthly expenses exceeding £3,000 since the support scheme ended.
He warns that thousands of retailers will face similar challenges, especially with rising minimum wages and other costs.
If stores go out of business due to these escalating costs, it will deprive communities of vital public services and have a significant impact on the economy as a whole.