'I'd have to charge £15 for coffee and cake just to break even'

Cafe owners say rising business rates and other costs are putting a dent in their trade.

Coupled with declining footfall, many say they are concerned about their ability to keep prices down, even with the help of the government's newly announced "High Street Strategy" .

In York, Jo Millner, who owns Milliefox Cakes, said her takings had dropped by 35% in the past year, compared to the previous 12 months.

"People just can't afford to spend anymore so they're buying smaller items or less of them," she said.

According to the British Retail Consortium, footfall in towns and cities across Yorkshire was down 4.5% in the three months to December compared to the year before.

Meanwhile, Millner said costs for her online bakery and café in Huntington were "going up and up and up".

She said 10kg (22lbs) of chocolate had risen from £64 to £160 in the space of 18 months.

"If we put the rising cost of food products and energy and wages and the new national insurance, we'd have to charge £15.84 for a coffee and a cake," she said.

"So we have to absorb those costs."

As well as challenges caused by business rates, Millner also said VAT in the hospitality sector was "all over the place".

"If I make a chocolate brownie and I give it to somebody to take away in a paper bag, they don't pay VAT. If they sit in with that brownie, they pay VAT.

"If I put it in a gift box, they pay VAT. If I cover it in chocolate, they pay VAT.

"There is no rhyme or reason to it."

Earlier this week, Chancellor Rachel Reeves announced that pubs and music venues in England would be given a 15% discount on their business rates bills from April and would not see increases for two years.

Rebecca Cook, who owns TeaHee Café in Easingwold, said the rateable value of her premises was due to rise by a third in April, leading to a rise in business rates, and said she thinks government support should be extended to all hospitality businesses.

"There's no other way of coping with all the increases that just keep coming," she said.

"It's a tightrope-walking situation really.

"We're open more often than the pub, during the day when older people are more likely to come out and look for somewhere warm where they can meet friends."

According to Paula Gouldthorpe, from the Federation of Small Businesses (FSB), ministers have "repeatedly ignored the needs of our high streets".

Gouldthorpe, the regional stakeholder and business manager for Hull and East Yorkshire and York and North Yorkshire, said confidence levels in hospitality, retail and leisure were lower than any other sector.

She added: "Over the course of the next few months, we are very concerned that we're going to see some increase in closures, reduction in staffing and perhaps some contracted hours of the opening of some of these high street retailers."

The treasury said £4.3bn of support in the budget was stopping bills rising for more than half of business properties.

On Lendal in York city centre, Mannetti's has had its "best year yet" since opening shortly before the Covid-19 pandemic, co-owner Marie Milburn said.

But she said that success was because she, her daughter and her husband were working at the café "constantly".

"I don't think people appreciate the amount of work that goes into something like this," she said.

"It has got to be a passion because you can't sustain it otherwise."

Gouldthorpe said businesses represented by the FSB "keep our high streets alive".

"We have seen business closures of family-run businesses that are 20, 25, 30 years old, that have actually left quite a big hole in their communities," she said.

She agreed with Milburn that owners of small businesses were often motivated by passion, not money.

"They do this because they want to provide a service, they want to support their communities, they want to employ people locally, all of these things that actually gets them out of bed and motivates them in the morning," she said.

She advised any businesses struggling to contact their local authority or the FSB for support, but added that a number of funding schemes were due to end on 31 March.

A spokesperson for HM Treasury said: "We're backing hospitality and the high street with a £4.3bn Budget package to cap big bill hikes - stopping bills rising for over half of business properties.

"Our Plan for Small Business will help SMEs access the tools and support they need to unleash their potential, and later this year we'll publish a new High Streets Strategy to do even more to back Britain's high streets."

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