Retailers are offsetting costs and revisiting their business plans in last-minute attempts to stay afloat amid a “cost-of-living crisis”.

Last month, inflation, at 5.4%, was at its highest for 30 years. Meanwhile, shrinking margins, soaring energy costs and lack of availability continue to put a concerning strain on the sector.

Joe Williams, owner of The Village Shop in Hook Norton, told Better Retailing he has already been forced to pass costs onto customers, as a result.

“All prices are going up from our wholesalers and small suppliers,” he said. “We are passing it on because we can’t absorb it. Our customers seem to understand in so much they see it happening in the supermarkets.”

However, Ian Handley, owner of Handley’s Go Local in Cheshire, stressed this would be a last-resort for him.

Soaring energy costs will force retailers to close stores

“We’re looking at it now,” he said. “We’ve held off passing increased costs onto the customer, but it’s going to eat into profit.

“So, we’re now looking at milk and bread, as we know a price rise is imminent. We’ll explain to customers, but I think most people realise it’s happening.”

To add to concern, retailers will be hit with a National Living Wage increase of 6.6% from April, as well as a National Insurance hike.

Despite calls from MPs to scrap the policy at the end of last week, prime minister Boris Johnson confirmed the plans, meaning employees, employers and the self-employed will all pay 1.25p more in the pound for National Insurance.

Speaking about his ability to survive this year, Ravi Raveendran, owner of Colombo Mini Mart in Hounslow, west London, told Better Retailing he is considering shutting his shop. “There are too many rising costs and too much work to consider,” he said.

OPINION: How retailers can weather the 6% minimum wage hike – Sam Coldbeck

“Rent is going up, electricity is going up, then there’s inflation. There’s nothing we can do.”

Samantha Coldbeck, of Wharfedale Premier in Hull, urged the government to recognise the “food industry as a whole industry in crisis”.

“I think we need to move together with supermarkets,” she said. “I know there are retailers who won’t want that, but I think it’s our way of being noticed.

“They have the voice when saying to the government ‘this is the help the food industry needs’.”

NFRN national president Narinder Randhawa added: “Independent retailers have already been hit hard by the pandemic, with many having to reduce staff levels and hours. The increase to the national minimum wage will have inevitable knock-on effects and will only make matters worse.”

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