In just under three years, businesses across Edinburgh have experienced a “perfect storm” of knockbacks, with the end of the pandemic only bringing new challenges as the cost of living crisis arrived in the UK.
Since the beginning of 2022, a wave of companies, shops and hospitality venues have been forced to close their doors, with many others speaking out on the severe struggles they have faced which have had an unprecedented impact.
Seeing rents, energy prices and the cost of supplies soaring in a short space of time, an investigation by Edinburgh Live found that those that have survived are still dealing with serious concerns for the future.
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Left with no other option other than to leave their livelihoods and abandon their businesses, the capital has seen a surge in many venues announcing their closures.
Earlier this year, the Silver Bowl in Leith, a family-run Chinese takeaway for over 50 years, shared with customers that they would be making the “painful decision” to close due to “spiralling costs.”
Following suit, others such as popular Morrison Street pub Monty’s and Gorgie sweet shop Candyland said they would be shutting up shop after the “rising costs of everything” meant they “could no longer keep doors open.”
Opening her dream business during the pandemic, local mum Ariel Wang had been running plant shop A Leafy Love Affair in Abbeyhill, but made the difficult decision to close the business after soaring costs meant “everything was getting too expensive”.
Similar challenges were named by local businesswoman Charlotte Brown, when she spoke to Edinburgh Live about the closure of her bar and restaurant, Ooh Mami, in Leith.
Launching in 2019, the 30-year-old announced the asian-inspired venue would be shutting with immediate effect in October, and explained how a “perfect storm” of rising costs and staff shortages had left her “struggling to sleep at night.”
She said: “We were in a bit of a perfect storm, with the tram works and costs. The constant opening and closing during covid was really frustrating because we would lose staff while we were trying to find our feet.
“Then with the rising costs, things like oil for fries, all you’re doing is burning it but it went from £90 to £180 overnight because it was coming from Ukraine. You don’t have a choice, you have to buy it and suddenly it was twice the price.
“I was suffering from staff shortages in August which is the worst time to hire which meant I worked nearly every shift in August, open and close. I ended up getting tendonitis because I was on my feet too much but I couldn;t stop working, the mental exhaustion too, trying to cut costs and come up with ideas.
“I’ve been in places where people have struggled to pay staff and suppliers and I decided that I didn’t want it to get to that point. It was pretty heartbreaking but there was some relief, the stress has gone down, at the time my skin was flaring, I was throwing up all the time from stress and struggling to eat and sleep, people said my entire colour had changed, whereas now I have a job where I can walk away at the end of the night.”
Just down the road from Ooh Mami, restaurant and takeaway Bundits of Leith told Edinburgh Live earlier this year that the same challenges had seen them almost shut for good at the end of the summer.
Owning two venues in the capital, Bundits and New Chapter, owner Matthew Korecki, 39, said that although they are just managing to survive, the impact on their business and staff has been unbelievable.
He said: “The VAT increase then we had a wage increase and then the taxes and then out electricity and gas contracts ended so we were attacked from so many sides it was unbelievable.
“The bills that were £2,000 a month for electricity are now £8,000, so that’s £6,000 which was our profit if we were lucky now going straight out and that’s not even including gas. The profit is non-existent and we’ve probably lost around £31,000 in June and July.
“We were considering closing at the beginning of August so it’s been really difficult. Even the price of cooking oil has gone up so much that now in New Chapter we can’t afford to sell chips because if we only make three or four portions during the week we can’t afford to have the fryer on.
“We’ve reduced some staff and we’re on the verge of pretty much being understaffed most nights. But this is all us taking risks every day, if someone calls in sick we’re really in trouble but we can’t afford to add someone else to the rota. We’re being attacked by so many things, I’ve had my businesses now for 10 years and I’ve never seen anything like it.”
In a bid to ensure others don’t go under, a selection of Scottish businesses launched the ‘Help out Hospitality’ campaign in November, to highlight how the crisis was affecting every aspect of the supply chain.
Spearheaded by Barry Knight, Director of The Full Range, a food and drink procurement firm, he said: “Scotland’s hospitality industry employs around 220,000 people, which makes up around 8.6 per cent of the country’s total jobs. The current cost-of-living crisis is having a significant impact on each and every operator, regardless of business size.
“The sector really is on ‘life support’ if help is not provided to trade more efficiently through the winter trading period.”
Facing their own costs soaring, many businesses in order to stay afloat have been forced to put their own prices up, a decision which will also impact directly on their customers, many of which are already trying to cut costs due to the crisis.
Also speaking to Edinburgh Live earlier this year, West Lothian hairdresser Kevin Girdwood, 42, stated that the rise in the cost of their services was one of the only things they could actively do to ensure the safety of their business.
A family-run business for over three decades, Brian Girdwood hairdressing were hit with an unimaginable rise in their electricity bill when their contract ended in September.
Kevin said: “We have a great clientele base that travel some distance to see us from right across the central belt. Turnover hasn’t been an issue for us before in that sense but with the increase in costs it’s been really worrying, it’s a huge increase in comparison to what we’re used to paying.
“Our margins are quite small and the only option we would have would be to put our prices up, because if we didn’t no business would survive that kind of increase. It means we’re putting it onto the consumer and that’s just increasing inflation. You would have to have a real think about whether you want to carry on in business if you weren’t going to put up your prices. It;s pretty grim.
“The business has had a few recessions and hairdressing is usually quite a safe profession, people always get their hair done. We’ve survived before and I’m not saying we won’t survive this but our only option is to increase our prices.”
With no sign of a resolution in the coming months, many establishments told Edinburgh Live that another wave of closures was yet to hit as they will “not survive the winter.”
Commenting on the crisis, the Edinburgh Chamber of Commerce echoed the concerns, with the impacts set to continue for at least another few years.
A spokesperson said: “Edinburgh Chamber has backed calls put forward by the British Chambers of Commerce and the Scottish Chambers of Commerce to ease the critical pressures on businesses, largely fuelled by soaring energy costs, skills and staff shortages, and high levels of inflation – 5% Vat on energy, temporary reversal of NIC increase, a review of occupation shortage list and further ‘covid-style’ support packages
“With the Governor of the Bank of England now stating there is nothing to be done to avert the impending recession, and the business tracking service suggesting up to 25,000 businesses are facing insolvency, we may find a very different labour market around the corner as businesses choose whether to pass on costs or cut spending and staff.
“Recovery is predicted to take until 2025 and with the ongoing war in Ukraine showing no sign of abating, we are looking to both the government and Bank of England for the right judgements and policies to avoid embedded inflation and the fastest possible return to stable growth and target two per cent inflation.”
Have you or your business been affected or forced to close due to the cost of living crisis? Get in touch with us at news@edinburghlive.co.uk
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