Rising Costs Put Pressure on High Street Businesses In York: Small businesses across Yorkshire say falling customer numbers and rising costs are making it harder to survive, even with the government’s newly announced High Street Strategy.
In York, Jo Millner, owner of Milliefox Cakes, said her business takings have dropped by 35% over the past year compared to the previous 12 months. She explained that customers are spending less because of the rising cost of living.
“People just can’t afford to spend anymore, so they’re buying smaller items or fewer of them,” she said.
Footfall Drops Across Yorkshire
According to the British Retail Consortium, footfall across towns and cities in Yorkshire fell by 4.5% in the three months leading up to December compared with the same period last year.
At the same time, Millner said operating costs for her online bakery and café in Huntington continue to rise sharply. She highlighted the soaring cost of ingredients, revealing that 10kg of chocolate has increased from £64 to £160 in just 18 months.
“If we passed on all the rising costs of food, energy, wages and national insurance, a coffee and a cake would cost nearly £16,” she said. “So we’re forced to absorb those costs.”
Confusion Over VAT Rules
Millner also criticised the VAT system in the hospitality sector, calling it inconsistent and confusing.
“If someone takes a brownie away in a paper bag, there’s no VAT. But if they eat it in the café, there is VAT,” she explained.
“If it’s in a gift box, VAT applies. If it’s covered in chocolate, VAT applies. There’s no logic to it.”
Calls for Wider Government Support
Earlier this week, Chancellor Rachel Reeves announced that pubs and music venues in England will receive a 15% discount on business rates from April, with no increases for the next two years.
However, Rebecca Cook, owner of TeaHee Café in Easingwold, said her café’s rateable value is expected to rise by around one-third, leading to higher business rates. She believes government support should extend to all hospitality businesses, not just pubs.
“There’s no other way of coping with all the increases that keep coming,” she said.
“It feels like walking a tightrope.”
Concerns Over Closures and Job Losses
Paula Gouldthorpe from the Federation of Small Businesses (FSB) said confidence levels in hospitality, retail and leisure are lower than in any other sector.
She warned that many businesses could face closures, reduced staff hours, or shorter opening times in the coming months.
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“We’re very concerned we’ll see more closures, job losses, and reduced services on the high street,” she said.
Passion Keeps Some Businesses Going
Despite the challenges, some businesses are still managing to succeed. On Lendal in York city centre, café Mannetti’s has had its best year since opening just before the Covid-19 pandemic.
Co-owner Marie Milburn said the success came from constant hard work by herself and her family.
“It has to be a passion,” she said. “You can’t sustain a business like this otherwise.”
Government Response
HM Treasury said a £4.3 billion support package in the latest budget is helping prevent bill increases for more than half of business properties.
A spokesperson added that a new High Streets Strategy will be published later this year to provide further support for small businesses.
Conclusion
High street businesses across Yorkshire are facing a difficult period as rising costs, falling footfall, and complex tax rules continue to put pressure on owners. While some government support is available, many small businesses say it is not enough to offset increasing expenses. For many owners, passion and community support remain the key reasons they keep going, even as concerns grow about closures and job losses in the months ahead.
What Do You Think?
Q: Do you think the government is doing enough to support small high street businesses, or is more action needed to prevent closures?
