Fish and chip shops aren’t alone in putting up their prices as the latest survey by Chambers Of Commerce shows around three quarters of businesses plan to do the same
The Chambers of Commerce earlier this month released the results of its latest survey which revealed 75% of businesses are putting up their prices due to soaring costs of wages, energy and raw materials. It also revealed that 50% of businesses are seeking to reduce costs, 18% scaling down investment and 5% considering ceasing trading.
It’s a battle operators have faced for some time but with VAT going up in April, the national living wage increasing by 6.6% and energy costs sky rocketing, it’s now not a question of “can we raise prices?” but “we have to”.
John Molnar, owner of The Cod’s Scallops, which has branches in Nottingham, Birmingham and Leicestershire, put his prices up in January and while he’s trying to be smarter – buying bigger quantities to get the prices down and doing superfood salads that come with a 10% discount for gym-goers – it’s only going some way to covering the rising costs. Come April, his prices are going up again by between 15-20% again, putting his takeaway fish and chips just north of £11.
“Nothing is going up 2 or 3% anymore,” says John. “My batter has gone up 10%, wine 9%, utilities 100%, even peas that used to be a 5p side order you’d get £1 for is now a 35p side order. It’s scary times but we do a lot of price comparisons with other takeaways and I still think fish and chips is by far the cheapest and best value for money takeaway.”
With the cost of haddock continuing to rise, Alastair Horabin, owner of Seniors in Blackpool was faced with the decision between taking it of the menu and increasing prices. He opted for the latter, but rather than adding 5p or 10p, he’s gone hard with a £1 increase. “We went heavy on things that need to be moved,” he says. “We’re not doing this for a hobby, we’ve got to charge the right price.
“Fish and chips need to be 65% gross profit and whatever you buy it at, you need to get to that margin. Protect your margins, you’ve got to make profit and it’s got to be sustainable.”
Putting prices up isn’t the only way to protect margins. With the price of cod and haddock increasing, it highlights a need for the industry to move away from relying on just two species. It’s an approach advocated by Mark Petrou at his shop Petrou Brothers in Chatteris, Cambridgeshire. At the same time as putting £1 on his cod – which in due course is to go up by another 50p, taking it to £7.50 – Mark has added pollock to the menu. Priced £1.50p cheaper than regular cod, it’s starting to outsell haddock.
“It was like diffusing a bomb before it went off. I say to customers if you really love cod but you don’t like the way prices are going, try pollock. It tastes very similar to cod, it just has a slightly different colour.
“I’m sourcing skinless, boneless IQF fillets from Smales and it’s super. I’m paying 70p a fillet and I’m selling it at £5.50. People have moved over to save money, they’ve stayed with it and I’m protecting my margin.”
It’s certainly not going to be an easy year, but by focusing on margins and thinking smarter, shops will survive. And as Seniors’ Alastair says: “Fish and chip takeaways have had two very good years, I hope some money has been saved for a rainy day because I think we’re going to have a couple of years where we might have to give a bit back.”