GOOD NEWS: Keeping coffee prices under control as they rise.
According to a painter and deco
rator turned café owner, keeping pricing fair for clients remains a significant difficulty.
Lee Howard has been running Forty Six Coffee Shop in Neath with his wife Guiliana for approximately ten years, but rising prices and an increase in the minimum wage have increased their costs.
Although price gains have eased somewhat since the 40-year high in October 2022, they remain above the Bank of England’s 2% objective.
On Thursday, the Bank of England stated that interest rates would remain at 5.25%, the highest level in 16years.
“We had to give our staff [an extra] 10% in April this year,” said Mr Howard.
“That, on top of everything else, has been the most difficult thing to incorporate really.”
The impact of last month’s increase in the National Living Wage from £10.42 to £11.44 an hour is one of the things rate setters at the Bank of England will consider before making their announcement.
Interest rates affect the cost of borrowing money and have a big impact on mortgages.
They are currently at a 16-year high of 5.25%, pushing up costs for anyone who wants to get a mortgage or re-mortgage an existing deal.
The bank raised interest rates to slow down inflation, which measures the rate at which prices rise, but increases in wages can lead to higher prices if employers pass on the additional costs to customers.
While it may be difficult for small firms like his, Mr Howard agrees that the salary increase benefits his employees, the majority of whom are renting (which is “extremely expensive”) or living with relatives.
One of them is Oliver Altissimo, who works at the coffee shop while attending university to study computer game creation.
The 23-year-old keeps his expenses down by living with his grandfather, but the cost of living still impacts him.
“I did notice a lot of stuff increasing in prices and it gets harder and harder,” hestated.
That is a sentiment echoed by many customers.
Adriana lost her job as a language teacher when her department was closed down during the pandemic, though she said she feels “blessed” that her husband is still in work.
Her friend Anne, a retired teacher, said she was “a lucky person” to have her pension but she has noticed things are “going up all the time”.
“They don’t just go up by a penny or two pennies, they go up 10p or 20p or 50p,” she said.
“It maybe slowing down a bit, but I don’t think it’s noticeable really.”
Despite the financial pressures on customers, Mr Howard said his diverse clientele remained loyal, though some treat their coffee as “more of a luxury” than a daily staple.
“The retirees, they’re OK,” he said.
“But the youngsters who are struggling to get a mortgage or just trying to get on the ladder, you might see them now once a fortnight rather than week-to-week.”
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