There are few more iconic British foods than a loaf of crusty bread. But as a sector fundamentally tied to energy markets due to the cost of heating ovens, bakeries are in real trouble, Finance Experts CompanyDebt warns about the incoming wave of insolvency faced by the UK bakeries. Many have seen 300% price increases in 2022 meaning the energy cost of running some small bakeries has gone from £1500-£4500 per month.
Iconic Bridport bakery Leakers closed this week after twenty years on the High Street. ‘Sadly, the current climate of escalating costs puts us in a position of uncertainty’ they said. ‘In tandem with rising costs of raw ingredients, our energy costs particularly are unsustainable.’
London baker Sophia Handschuh started her Sourdough-focussed artisan bakery at the end of lockdown. After a hugely popular Kickstarter campaign, she opened on Christmas Eve last year, and now sells up to 300 loaves and 400 pastries each day. But this year’s energy price increases have forced her to take a £50,000 loan and raise prices twice for her loaves, baguettes and pretzels.
“We couldn’t up our price to reflect this inflated bill anyway as we’d need to start charging maybe £20 a loaf to compensate which is why so many businesses in the UK just simply pay what they can and rack up a debt that we all hope this government will finally deal with.”
Despite the government’s recent announcement of a 6-month price cap on business energy, many fear a tide of bakery insolvencies may be inevitable. Bakeries are fundamentally dependent on wheat prices, as the core ingredient in most pies, pastries and breads. Since May 2021, wheat prices have gone up 165% due to the war in Ukraine. Those with fleets of delivery vehicles also face the cost of soaring fuel prices. Key ingredients like butter and oil have risen steeply, while the whole UK food sector faces massive staff vacancies due to Brexit.
Editor: Kiran Grewal email@example.com