Small businesses are being forced to raise prices as they struggle to absorb costs

Small businesses are being forced to raise their prices as they struggle to absorb soaring costs.

This is the conclusion of Matt Griffith, director of policy at Business West.

He told the Financial Times today that small businesses need to start recouping costs and increasing prices “is the only route left for many. “Financially, they have nowhere else to go”.

He added: “We are seeing a lot of companies wrestling with a post Covid pricing dilemma.

“Having taken big hits to their income and balance sheet, and with tougher labour market and supply chain pressures, raising prices is the only route left for many of them. Financially, they have nowhere else to go.

“Our survey data has shown historically very high inflation concerns for a couple of years now, widening from Brexit and supply chains to energy and the past six months has shown no let-up”.

Vicky Lee, who heads up the Bristol City Centre Business Improvement District (Bid) agrees with Matt Griffith.

She told the Financial Times that many of the companies she works with in Bristol city centre cannot keep their costs down.

But she says they don’t have “the buying power, the strength to reduce cost per unit by purchasing on a larger scale”.

Stuart Hignell, who runs Bristol Gas Supplies, said:

“How can I turn around to these people and tell them their prices are going up?

“But something’s got to give — you can’t just keep sucking it in and sucking it in”.

Jeremy Kynaston, Managing Director of No.1 Harbourside a bar and restaurant based in Bristol said:

“When people go out, they know its going to cost a little bit more, and its up to us to make sure we’re clever about quality and standards.”

Greg Pilley, owner of Stroud Brewery says he has had to increase his prices by 7% in the last few months.

Greg says he’s had to increase prices by 7% in the last few months. 

“I think next year we will see a change in global grain prices due to the war in Ukraine. We use about 40% UK hops and about 60% overseas. Predominantly they travel through Europe. 

“The increased tariffs from hops is causing us to put prices up significantly. There’s more friction on supply so it’s also becoming more difficult to access them which is time and cost.”