SKEGNESS, England – August 30, 2022: Salt’s fish and chips shop in Skegness, Lincolnshire. Manager Liam Parker told TBEN the family business is looking to cut costs over the winter as rising energy and fish prices weigh on small businesses.
SKEGNESS, England — Traditional British fish and chip shops are facing an “extinction event” as energy and fish prices skyrocket, the industry’s official body and shop owners have warned.
The UK is facing a historic cost of living crisis as a result of an ongoing upward spiral in energy bills, which has pushed inflation to double digits and is expected to worsen into next year, hammering consumers and small businesses.
Meanwhile, prices of fish, potatoes and oil have soared in the face of the Russian invasion of Ukraine and a subsequent series of international sanctions. Russia is one of the world’s largest producers of seafood and is a major supplier of whitefish to many countries.
“It’s starting to paralyze us a bit – the [school summer] next week the holidays are over and people will be focusing on energy prices, so I think this winter is going to be tough,” David Wilkinson, owner of The Blue Fin restaurant in Skegness, Lincolnshire, told TBEN last week, adding that it The company has already seen its energy bill rise by 60% this year.
“Most people are talking about only being open a few days a week because it’s so quiet here. I think a lot is going to fail if we don’t get help from the government.”
David and his partner Eileen Beckford have been running the restaurant in the center of the coastal town on the east coast for seven years, a traditional domestic summer holiday destination for many Brits.
SKEGNESS, England – August 30, 2022: David Wilkinson (R) and partner Eileen Beckford (L), owners of The Blue Fin in Skegness, Lincolnshire, worry about the future as fish and energy prices rise as traditional British fish and chips hammer shops.
“I used to have the restaurant open upstairs and downstairs, lots of staff – can’t do it now, we just have to put it on trays, ask the same price, save money on the cost, which helps ease the cost a little bit. It’s a nice one now margin, that’s for sure,” he said. The Blue Fin is also struggling to find staff as the country’s labor market remains extremely tight.
Prior to the pandemic, he paid £70 ($81.16) for 3 stone (42 lbs) of fish, but that has now reached £270, with much of his fish coming from Russia. The British government has introduced an additional 35% tariff on seafood imports from Russia as part of its post-war punitive measures in Ukraine, and Wilkinson’s suppliers have informed him that this is likely to hit even harder in the winter.
Many fish and chip shops are turning to Scandinavia instead, and representatives from the National Federation of Fish Friers (NFFF) recently traveled to Norway to try to mitigate the problem of rising prices.
A key issue facing the industry is the extent to which fish and chip shops can pass on cost increases to consumers before losing sales, with fish and chips long considered an affordable treat, especially in traditionally working-class areas of the country.
‘We are afraid’
Liam Parker, manager of Salt’s Fish and Chip Shop across town, has seen energy prices double as it opens for longer trading hours in the summer, and the company tries to conserve as much energy as possible in the winter.
“In the winter, Skegness goes from very busy to a bit of a ghost town. We will keep an eye on everything and not overdo it,” he told TBEN last week.
“Obviously the hours are getting a little shorter, but we’re trying to make as much money as possible in the summer to get through the winter.”
The family business has been forced to raise its fish prices twice this year as wholesale prices have risen by around £20 per box, Parker estimated. Suppliers cite higher travel requirements and rising fuel costs to retrieve fish as the main drivers of price increases.
“We’re hopeful at this point, but don’t get me wrong, as owners we’re scared. We’ve had conversations between the whole family, what we’re reading, and we’re unsure of what the future will hold,” Parker said.
The company has reached out to suppliers to try to hold prices for a year or more, but the uncertainty of the macroeconomic and geopolitical outlook means many are unwilling to engage in such talks, he added.
Andrew Crook, chairman of the UK’s National Federation of Fish Friers and owner of Skippers of Euxton restaurant in Chorley, Lancashire, told TBEN on Monday that this may be the worst crisis the industry has ever faced.
The price of fish and chips at Skippers has risen £1.60 since the start of the year, but Crook said the price he pays for fish has now doubled. He suggested the outlook is “very frightening” as the impact of the 35% tariff on Russian imports is not yet fully reflected in the prices charged by suppliers.
Meanwhile, a drought in the UK has hampered crop production, which Crook expects will push potato prices further, and the price of sunflower oil, used by many fish and chip shops, has doubled but is beginning to level off as supply shortages disappear.
“It’s a really bleak picture, but we’re resilient, we’ve got a great product and I’m sure the industry will get through it. It could bring quite a few people down along the way – I’m pretty sure it will, said Crook.
“I don’t think it’s just fish and chip shops that have been affected, although we have unique pressures from the conflict due to our reliance on some products coming from Russia and Ukraine, so we’re probably going to bear the brunt of it, but I think this is really an extinction event for small businesses with no government intervention.”
SKEGNESS, England – August 30, 2022: High Street in Skegness, Lincolnshire, popularly known as Chip Pan Alley.
The NFFF has lobbied the UK government to reform its small business tax system, with VAT (Value Added Tax) – a levy on goods and services at every stage of the supply chain – returning to 20% from April after an aid package during the Covid-19 pandemic.
“We’ve always had a pretty tight margin because fish is expensive, and we’ve always had a pretty low selling price, but we’re working on volume. We’ve always felt the pain of VAT – I think now the rest of hospitality are all saying the same thing Crook said.
“Now is the time. We need a courageous government to make these difficult decisions and recognize it as an investment in the future, because we are creating great jobs.”
Business energy customers do not enjoy the same freedoms as households to switch to a new provider during the contract term, he explains. The NFFF is also calling for an overhaul of the energy supply system to better reward companies that invest in human resources and environmentally sound practices.
“Small businesses are the largest employer in the country. We were always known as a nation of retailers — I don’t know what we are now, to be honest,” Crook said.