As Christmas has pinched people’s pockets of every penny and with the January payday seeming far away based on drained bank accounts, many find themselves in this January month cutting back on spending. According to a survey by KPMG, 58% of consumers say going into the new year they will be cutting back on non-essential spending. 

But what does this mean for the small businesses in Jesmond that rely on our spending during these tough economic times?

There are few businesses now not feeling the bleak consequences of the cost of living crisis as it lingers on. But in Jesmond, small businesses at Jesmond Food Market are reaping the consequences of this global economic crisis, and some are struggling to stay afloat.

The combination of the energy crisis, soaring inflation with higher operating costs, and less spendable income from consumers combined together are straining local businesses and pushing them to almost breaking point.

Taking place twice a month, on the first and third Saturday of the month, the market showcases numerous stalls and pop-ups celebrating local small food and drinks businesses that are independent sellers in Jesmond and surrounding areas.

Jesmond Food Market on Armstrong Bridge (Image by Olivia Walters/JesmondLocal)

From luxury food treats for pampered pets to delicious smoked charcuterie meat stalls, the market offers food and drink options for the pickiest eaters to the most adventurous. These small businesses rely on the Jesmond and surrounding areas communities to come to support them as independent sellers twice a month.

Inflation has been a key catastrophic problem for businesses at Jesmond Food Market. Cost increases have risen for businesses all over the UK as a result of soaring inflation. In November 2023 the Consumer Prices Index (CPI) stood at 3.9% according to Crossland.

Despite falling for eight consecutive months, inflation rates still stand exceptionally high. Consequently, expenditure for small businesses at Jesmond Food Market has been growing rapidly, which in turn is lowering their profit margin substantially.

Xerxes Setna from Mazzeh Spice, a Persian spice mix business at Jesmond Food Market told JesmondLocal, “There have been significant effects of the cost of living crisis on our business. Inflation and rising prices have increased our direct costs such as packaging and ingredients. The only way to mitigate the effect of rising costs would be to increase our prices.”

Now many residents of Jesmond are purchasing fewer products and less often at the market. Georgia Thorpe, a shopper at Jesmond Food Market, told JesmondLocal: “As small businesses charge higher amounts for their products, I have had to start limiting the amount I spend here. Instead, I shop more and more often for my food and drink shopping at large chain stores like Tesco as they have cheaper prices.

Thorpe added: “Coming here and buying food is seen as more of a rare treat as it’s becoming more expensive.”

Some, but very little, support has been provided to these businesses from the government. The Energy Bills Discount Scheme (EBDS) was implemented by the government in April 2023 for 12 months to provide support to non-domestic customers (including businesses and charities) with their energy costs.

Jonny Payne from Glazed Donuts, a doughnut shop selling at Jesmond Food Market told JesmondLocal, “We had help from the government during the pandemic like most others but were granted a percentage off business rates relief following the pandemic for the cost of living.

He added: “Our energy contract runs out in January so we’re expecting an increase in energy costs then without any help.”  The help from the government is time limited and only covers one small aspect of the economic hardships for businesses.

Other businesses such as Mazzeh Spice received no help from the government. The lack of support means many small businesses are being forced to shut down as they cannot cope with this economic crisis. According to Credit Connect in 2022 with 345,000 businesses shut down in the UK. This was the highest increase of businesses closing since 2002.

Many small businesses have had to turn to second incomes to be able to stay afloat. Setna told JesmondLocal, “Income has reduced. But we are fortunate that we are surviving because we have a second income – but this too adds pressure of having to work additional hours”. 

Unfortunately, small businesses at Jesmond Food Market are struggling to make a liveable wage. It’s the hard truth for small food businesses who are facing the toughest economic times in many years while fighting for competition against big chain corporations. To keep these small businesses afloat at Jesmond Food Market is to shop locally as often as possible.

As Payne from Glazed Donuts tells JesmondLocal: “It’s cliche, but they quite literally wouldn’t be there without your custom”.