We recently received notice from the Valuation Office Agency that the rateable value of our warehouse premises in west London will increase from £41,000 to £60,500 – an increase of almost 50% year on year. Our annual rent for the property is already approximately £70,000 per year.
As a small business owner, I genuinely struggle to understand how rates can rise to levels approaching the actual annual rent itself, particularly during a period when businesses are already facing unprecedented financial pressure.
Rising operating costs
I am the director of an independent European food supplier based in west London. Like many SMEs operating within the UK food supply chain, we have spent the past several years watching operating costs rise across almost every area of our business.
Fuel, logistics, post-Brexit administration burdens, energy, staffing and insurance have all increased substantially. We have tried hard to absorb these pressures without continuously increasing prices for customers already struggling with the cost of living. But there comes a point where independent businesses simply run out of options.
The biggest question businesses like ours face is simple: where exactly are we supposed to find the additional money to cover these increases? There are only a limited number of answers, and none of them are positive.
We can increase prices, but that only contributes further to food inflation. We can try to increase sales volumes, but consumers are spending more cautiously and competition has never been tougher.
We can look to reduce costs elsewhere, but after years of rising overheads there are very few areas left where independent businesses can realistically save money without affecting staffing, service levels or future investment.
For SMEs, these types of increases do not simply reduce profitability, they directly threaten sustainability.
The importance of independent businesses
Unlike large national operators, independent businesses do not have the ability to spread costs across multiple sites or absorb prolonged financial pressure through large corporate structures. Every increase has a direct impact on day-to-day operations and long-term viability.
Independent importers and wholesalers play an essential role within the UK food industry. Businesses like ours supply specialist European products to retailers, restaurants and communities across the country. We employ local people, support supply chains and contribute to local economies. But there is growing concern across the sector that smaller operators are being pushed towards breaking point.
The current business rates system, particularly for warehouse and distribution premises, needs serious review. Increases of this scale should not happen without proper consideration of wider economic conditions and the cumulative pressures businesses are already facing.
Government, retailers and industry bodies all need to recognise that independent wholesalers and importers are critical to maintaining competition, diversity and resilience within the UK food market. Without meaningful reform or support, the likely outcome is simple: higher prices for consumers, reduced investment, fewer jobs and more independent businesses disappearing from the market altogether.
That benefits nobody.
Kateryna Leclerc is director at EuropaFoodXB
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