Independent retailers are at “breaking point” one month after the government stripped them of any support to help keep the price of their energy bills down.
Last year, eligible businesses were given a lifeline when the Energy Bill Relief Scheme was introduced, giving them a discount on wholesale gas and electricity prices from October to March.
Leading up to the cutoff date, the ACS warned that 7,000 stores could be forced to close, if the support wasn’t extended.
Despite this, businesses were left in the dark. As a result, several store owners told Better Retailing that their bills have seen a monthly uplift of more than £2,000.
Ruhail Shahazad, of Tremorfa Superstore in Cardiff, said he didn’t know how he was going to continue operating if more help was not made available.
“My bills were averaging £800 a month but now they have gone up to £4,700 with no support,” he said. “There must be more help. Retailers feel suicidal. I’ve spent decades building my business and now when I look at my wife and kids all I can think of is increasing bills.”
To save costs Shahazad has switched off half the fridges and freezers in his store. He added: “Coming into the summer months, people want chilled drinks and ice creams. I am now losing customers.”
Meanwhile, David Lomas of Lomas News in Bury is in a fixed contract with his supplier until December. Despite wholesale costs dropping he is still being charged 62p per KWh for electricity despite current rates being around 33p.
He said: “The energy minister must compel energy companies to renegotiate fixed contracts on current prices. My energy costs have almost tripled to £400 a month for electricity but this would be higher if I hadn’t changed to LED lighting and turned a chest freezer off. It makes me so angry.”
According to the ACS, there is currently an estimated 6,900 independent convenience stores stuck in excessive fixed contracts.
For an average convenience store facing rates of up to 95p per KWh, this would mean paying more than £75,000 per year for energy bills compared with £20,000 in 2021.
A spokesperson said: “Energy companies need to allow businesses to renegotiate their contracts or blend and extend them to relieve the acute pressure.
“We also need the government to support local shops by introducing tax and investment incentives, including reliefs, discounts or vouchers, to enable convenience retailers to invest in energy saving initiatives and in turn reduce their carbon footprint.”
The Fed’s national president, Jason Birks is also urging government to urgently address the issue. “The decision by the government to end the support being given to small businesses is extremely worrying.
“Many are struggling to remain open at present and reducing this relief is likely to see businesses close. Additional financial support must be given,” he said.
Energy consultant John Lyons said he had been contacted by a retailer now paying an excess of £3,000 per month since the support scheme ended.
“Thousands of retailers are going to fall into this same category and with minimum wage and other costs going up, it’s a kick in the teeth,” he said.
He also reported that scammers were targeting retailers with fake contract offers and warned retailers not to agree to anything over the phone and always have offers in writing.
As well as reducing energy consumption by moving to LED lighting and using more energy efficient chillers, Lyon’s also urge retailers to lobby their MPs for support. “If your MP is conservative stress that they won’t be in those seats if they don’t get support from small businesses.
“If stores go out of business due to rising energy costs, it means communities won’t get access to vital public services and it has a major impact on the economy as a whole.”
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