Fish and chip shops are under threat as inflation soars



London
CNN Business

UK fish and chip shops are under strain as prices for key ingredients – including cod and cooking oil – soar following Russia’s assault on Ukraine.

Up to a third of the country’s nearly 10,000 fish and chip restaurants could close in the next nine months, said Andrew Crook, president of the National Federation of Fish Fryers. The crisis is the worst he has seen, he told CNN Business.

The trade group represents 1,200 fish and chip companies and has been around for over a century.

Crook, who has his own shop, said prices started to rise towards the end of last year but costs for basic ingredients have skyrocketed since late February when Russia invaded Ukraine. .

“Overall, everything went up,” Crook said.

Businesses across all sectors are grappling with soaring prices as supply chain issues have been exacerbated by the war in Ukraine. But British fish and chip shops, which traditionally operate on very tight margins, are feeling particular pressure due to the industry’s reliance on Russian imports.

Up to 40% of the industry’s cod and haddock come from Russian waters, and about half of its sunflower oil is imported from Ukraine, Crook said.

Companies are paying about 83% more for sunflower oil compared to early March, according to Crook. Palm oil, a common alternative, has doubled in price. Indonesia – the world’s largest exporter of palm oil – began restricting exports last month to help maintain domestic supplies.

Adding to the pain are sky-high energy bills and soaring prices for the fertilizers needed to grow potatoes.

Fish and chips is one of the unofficial national dishes of the United Kingdom. The first stores opened in the 1860s and spread rapidly as the country industrialized, helping to feed factory workers, according to the trade group. During World War II, when the government rationed other staple foods such as tea, butter, meat, fish and chips, the dish was so important to the working classes.

Customers expect their fish and chips to be cheap, Crook said. A year ago the average price for a regular cod and chips was around £7, Crook said. Now he reckons it’s around £8.50, an increase of 21%.

“We run the risk of foreclosing ourselves from the market…we try to keep increases as low as possible,” Crook said. Some have already turned away.

“I lost regular customers who came every Friday,” he added.

Fears that the British government will impose steep import tariffs on Russian whitefish have prompted companies to source alternatives, further raising the price of the Icelandic and Norwegian fish that Crook buys.

The price of a case of Icelandic cod is now £270 ($331), down from £140 ($176) this time last year, Crook said.

Companies like Crook’s face the daunting task of selling fish and chips to customers facing the worst cost of living crisis in decades. Annual consumer price inflation hit 7% in March, its highest level in 30 years, and could hit 10% later this year, according to the Bank of England.

Over half a million small businesses in the UK – that’s about one in 10 – are considering closing, downsizing or selling in the next year as many struggle to secure financing, according to a survey by the Federation of Small Businesses.

For Crook, the fate of his shop is personal.

“It’s more than just a job. For many of us, we took over family businesses,” he said. “I’m second generation in the business – and you don’t want it breaking on your watch.”

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