“It’s just not sustainable”: the cost of living crisis hits the sustainability sector | Small business

With just a week to go until Christmas, shoppers are rushing to pick out their last gifts – and retailers are jostling for the much-needed end-of-year custom.

For many small UK businesses, the cost of living crisis has hit profits. For those whose mission is sustainability, the ripple effect has been dramatic.

The independent durable goods retail sector grew rapidly in the early months of the Covid-19 pandemic, with entrepreneurs launching home-based start-ups and a boom in online shopping.

However, economic conditions have changed dramatically since last Christmas, with many shoppers favoring less expensive gifts over durable ones. Add to that the disruption of supply chains and the increased cost of doing business caused by Russia’s invasion of Ukraine – and in some cases Brexit – and the result is that hundreds of independent businesses are closing. this year, while many others are struggling to stay afloat.

Fay Watts, director of The Dispensary, in Salford, is preparing for her final days of trading before reluctantly closing her doors for good. At her main street store she offered a refill service for household products and for a while business was booming.

“We opened in 2019 and business has been good throughout the pandemic,” she says. “But the last six months have been extremely difficult and I haven’t been able to afford a salary for a year.”

Watts adds that his mental health suffered as the business struggled and debts mounted. “I never really understood the ‘death of the main street’ until I had a brick and mortar store. But it’s incredibly difficult to change consumer habits and difficult to compete with the convenience offered by supermarkets. »

Zero Waste Path, which started in an Edinburgh flat in 2018, will close at the end of January. Its co-founder, Giulio Corsi, says the sustainability industry boomed for a few years, but in 2022 “demand dropped dramatically”, resulting in a 40% loss in sales compared to 2021.” Add to that rising rents, record high energy bills and the rising cost of ingredients…it just isn’t sustainable anymore.

Anni Kriesche, founder of London-based company Funky Soap, says 2022 has been the toughest year since her business started operations a decade ago, with the Russian invasion of Ukraine having had a major impact. “As soon as the war started, the price of many of our ingredients doubled, seemingly overnight,” says Kriesche.

Anni Kriesche from Funky Soap
“We’ve come this far and we’re not giving up,” says Anni Kriesche of London-based Funky Soap. Photograph: David Parry/PA

Many suppliers closed and by July she was struggling to pay her staff and discussed winding up the business with her accountant – “a really low point”. However, a restructuring gave her a much-needed boost and helped her seize the opportunity to try new approaches.

Kriesche says, “We started looking at each ingredient and figuring out how we can buy it in bulk and cheaper. We’ve also focused a lot more on gifts and personalization. We have come this far and we are not giving up.

Manchester-based sisters Trina and Charlie Gill run Life Before Plastic, an online store of sustainable products made by independent zero-waste retailers. The idea was born from a trip to Nepal in 2018 and for three years the company has grown steadily.

However, as the cost-of-living crisis took hold, the number of providers dropped significantly, the Gills say. They cite several, including Naked Necessities, The Kind Store and The Beeswax Wrap Co, which folded in 2022, with new closings almost daily.

Life before plastic products
Charlie and Trina Gill of Life Before Plastic say 20 of their 100 suppliers have gone bankrupt in the past six months. Photography: Life before plastic

In the last half year, 20 of their 100 suppliers have gone bankrupt. November revenue was down more than 50% year over year.

“For us, that means fewer choices and fewer manufacturers to support,” Trina says. “We are now in the season of gifts, and you can really see the drop.”

The cost of sales has also increased, with the sisters having to incentivize customers with discounts or free gifts. “It’s the pressure that comes from big companies that can afford to have sales. For us, ultimately, it comes out of our pocket.

Trina explains that while zero-waste products generally last longer than cheaper alternatives, the higher price tag makes them prohibitively expensive for those who live paycheck to paycheck.

Brexit has also had a ripple effect. “It was becoming prohibitively expensive to sell in Europe because customers had to pay postage as well as customs and VAT,” Charlie explains. “We made the decision to stop shipping internationally, which cost us 20% of our customer base virtually overnight.”

Colette Webb, founding owner of another online sustainable goods retailer, Vera-Bee, has also experienced a “definitive downturn” in recent months, saying revenue is down about 30-35% year-over-year. the other.

Webb’s business was founded in 2019 at his West Sussex studio, stocking handmade, plastic-free items made by other small UK businesses. As the business grew, she rented a larger business unit, but has now returned to her studio to save money. “Attracting new business is very difficult right now. Vera-Bee is my only source of income, so I had to tighten my belt.

However, Webb remains quietly optimistic. “The loyal customers we’ve had for two or three years are staying; they understand what we are doing.

Dean Harries, co-founder of sustainable shaving brand Shoreline, says the seasonal retail surge in Christmas shopping started a month later this year, “around the end of November”.

Harries says, “People obviously had less money to spend after that first energy bill landed on the doormat…a lot of people had to give up on sustainability.”

He plans to adapt to harsh economic realities by moving Shoreline from wholesale to retail, at a time when bulk orders and loyal customers are hard-earned.

Shelley Brown, founder of The Good Life, which has two stores in Stockport, also says trade has ‘dropped dramatically’ this year and her focus has shifted to ‘just surviving’.

Brown says many of his regulars have to go back to shopping at the supermarket. She adapted by selling online, but admits it has been “extremely difficult and stressful”.

Trina and Charlie Gill are also adapting to survive the coming year, providing corporate gifts and training to companies that want to improve their ESG (Environmental, Social and Corporate Governance) credentials.

Trina says, “The cost of living crisis has been the nail in the coffin for many small businesses who often don’t do it for profit, but because they care. If they don’t show the way, who is? They are not politicians.

As Watts locks the door to her store for the last time, she sums up the mood: “Money is tight right now, but we have to ask ourselves what we value and where we want to spend our money. Investing in local and sustainable businesses is investing in a future that we all want.

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