We’ve talked about meta data points and big picture economic scenarios this week already with the question about the true state of the UK economy.
But an economy is made of hundreds of thousands of businesses, industries and trades and sometimes you can get a better understanding and idea of the reality by zooming in and looking at things a little closer.
And what could be more representative of Britain and the British economy than the good, old-fashioned fish and chip shop?
Well - it turns out it’s not a moment too soon to dive in because a lot of them might soon be financially underwater.
Andrew Crook, president of the fish and chip shop trade body, the National Federation of Fish Friers, thinks that up to 3,000 of his members could close this year because of the various problems facing them.
He said: “It really is a perfect storm and I think our members are definitely in trouble” - facing a twin threat of rising costs coupled with supply shortages.
One example is the price of sunflower oil that they use to fry the fish and the chips in.
It has gone from £30 for a 20-litre drum at the beginning of April to £44 (a 47% rise) last week. Additionally the price of potential substitute palm oil had risen from £14 for 20 litres to £29 with the NFFF thinking it could rise beyond £30 or even £40 in the next few weeks.
Crook continued: “Because half of our sunflower oil comes from Ukraine, the conflict is not only forcing the price up of sunflower oil but also palm oil too because everyone’s trying to buy as much as they can.”
This is also being impacted by a ban on palm oil exports being instigated by the Indonesian government who supply a fifth of the UK’s palm oil - forcing the price up even more due to scarcity.
The cost of other fish and chip shop staples have also risen with beef dripping doubling in price to £41 for 20 kilos while fish itself is “the most expensive it’s ever been”.
Crook says that shops will have to explore cheaper alternatives to traditional cod and haddock including hake as the former would be at a premium price.
40% of the industry’s cod and haddock supplies come from Russian waters so many shops have been looking to alternatives such as Icelandic and Norwegian fish instead to avoid an imminent UK-imposed 35% tariff on Russian caught fish. The price of a case of Icelandic cod is now £270 (£140 last year) mainly due to the stampede of buyers trying to secure their own supplies.
There are also increasing problems with potato supplies. The cost of fertiliser is increasing so farmers are increasing their prices to compensate and additionally there are fears going into the Summer.
Andrew Crooks said: “A big fear is the weather at the moment. We’re heading towards a drought, just as the potatoes are growing. If we don’t get rain and they don’t grow that could be a big worry as well. So we’re just going to roll with the punches.
“It’s definitely going to be tough. My business is going to struggle to get through because consumers seem to just want to go on price. I’ve been in business for 22 years so you kind of get a thick skin, but if you don’t you want to cry.
“It’s more than just a job. For many of us, we’ve taken on family businesses. I’m second generation in the business and you don’t want it failing on your watch. If I were a panicker, I’d be very scared.”
These views are echoed by Martin McTague, national chair of the Federation of Small Businesses (FSB). He said: “An increase in the cost of cooking oil, and a decrease in its availability, is bad news for small restaurants and cafes, especially ones which use a lot of oil, like fish and chip shops.
“Switching suppliers is unlikely to help, as the issue is widespread, while switching to a substitute product may not be possible, due to price, different performance of the oil at high temperatures, or other concerns.”
This chimes with the FSB’s own research for Q1 which found that 90% of businesses in the accommodation and food service sector had experienced increased costs over the past three months with 40% reporting a “significant” increase.
Inflation is also being brought to bear across the whole industry - not just affecting the shops but also the suppliers and their fishing fleets including fuel for the boats.
Evidence is growing that operators all over the UK coast are making hard decisions about when or if to head out to sea as the higher prices received for their catch are rapidly being outstripped by the cost of the fuel.
Barrie Deas, chief executive of the National Federation of Fishermen’s Organisations (NFFO) said: “For certain methods of fishing, it’s reaching that kind of tipping point where fuel costs are maybe 50% or 60% of the operational cost of the trip.
“When you reach that tipping point, it’s just a question mark whether it’s viable to continue fishing. Boats are considering whether they have to tie up now for a while.”
The NFFO are asking for increased government support pointing out that fuel subsidies have been given in recent weeks to French and Spanish fishermen by their governments. Deas continued: “This creates an uneven playing field. If you don’t catch and land fish, you don’t have a supply chain.”
A spokesperson for the Department of Environment, Food and Rural Affairs said: “Like many sectors, the fishing industry is facing challenges as a result of global fuel prices.
“Marine voyages relief provides eligible vessels with 100% relief on their fuel duty costs, and we continue to engage with the industry to discuss ongoing challenges and potential mitigations.”
From a pure monetary value the fishing, aquaculture and processing sector represents 0.1% of the UK economy contributing £1.4 billion but its symbolic importance and value to the coastal communities around the UK from Scotland, the North East and Cornwall that depend on the fishing industry is a lot greater.
There are certain staples and touchstones throughout life that should signal danger if they are under threat.
Fish and chip shops are just one example. They escaped rationing restrictions during the second World War because they were so important to national morale and the fact that so many are facing difficulties now should be a big wake up call not just to the authorities but to business owners and directors themselves.
Even if their business is not in hospitality, it’s important to consider that if it can happen to something like the fish and chip industry, then it could happen to them too.
We offer a free initial consultation to help anybody who wants to strengthen their business before tough times come along - or to join financial struggles if they’re in danger of succumbing to debts.
So If you’re a fish and chip shop owner needing help then we can let you know what options are available to you, right now, to help you keep the fryers frying and the country well fed.
Or if you can’t see a way forward for your business and are looking for a way to close efficiently then we can help you manage the process in the most orderly way to let you move on with your life and career even sooner.