“Great food but expensive” (*cue spirited response from owners*)
“I warn you that their prices are up there with the likes of Costa but worth a treat….” (Costa! bahaha! *cue even more spirited response* )
In amongst a lot of amazing reviews which we LOVE reading, thank you so much – our dear Friends of Rex and reviewers on Google & Tripadvisor prove that they think about pricing & the cost of living, and the value of what they buy on a daily basis. Well, great minds think aike 🙂 Like many small business owners in Britain, we obsess about these issues ALL THE TIME!! We really have no choice if we want to keep opening the Rex doors. Readers of our earlier blogs will remember what a steep climb it was to launch the bakery… we now know is that the challenges are on a never-ending escalator, they just keep coming.
They are both big & global but also micro & local. We are facing unprecedented developments in this country: UK government debt, local council underfunding, Brexit, exchange rate collapse, predicted inflation & interest rate rises in US post-Trump election… here are some of the ways that we already see these landing on Rex Bakery.
One of our 4 principles is to always select the best, premium ingredients we can find. We’ve explained how we exhaustively selected our sausagemeat for our sausage rolls, that we will only use organic flour with no cheating additives across the bakery, about the special creme-fraiche Normandy patisserie butter that we use.
Unfortunately we have seen price increases in many of the ingredients we select, and we have been unable to find any cheaper alternative that passed our standards. There is rampant food inflation in:
- Butter. You may have noticed yourselves how even traditional unsalted butter prices have gone up +30% in some supermarkets. That’s because there is a demand & supply issue in Britain and our country imports a lot of butter from France & beyond. At Rex, we use a LOT of butter…. 🙁
- Fruits & vegetables. Many of the fresh produce we buy every week is imported from Spain & Holland
- Nuts & seeds. Britian doesn’t even produce all the ingredients we use (sunflower seeds, almonds, walnuts…) so are highly subject to dollar & euro exchange rate changes
The truth is that for a best selling product like gluten-free Boiled Orange Cake, the orange & ground almond we use makes the cake now far more expensive than a traditional flour-based cake.
2/ Staff costs
We are proud to now employ >25 talented, lovely people in Rex – we suspect that’s more than anybody else on the parade. We have permanent full timers, part timers and a roster of occasional hours weekend & holidays staff. We have always had a policy of paying above the minimum wage for each age group so the announcements regarding Living Wage don’t change anything on paper… although they do in reality, because we of course need to move all the pay scales each Budget. Our wage bill is some +70% higher today than the day we opened but ahem, that’s not true of our bottom line!!
In particular we hope we can continue to attract our skilled craft bakers into Rex. With the demise of British bakery colleges & qualifications coupled with the prevalence in “pushing a button” mass production line baking operations in this country – we have found that it is harder & harder to find, attract to Little Chalfont and then keep the right artisan bakers. Thank goodness for our European highly skilled neighbours who love Real Bread & know how to make it! Although we do fear that the Home Office is pretty unlikely to recognise that they must include Artisan Baker as one of the skilled welcomed professions for new arrivals once UK exits from the EU – perhaps we need to start sending a Rex Sourdough or two to Theresa May in her nearby Maidenhead constituency to make the case!!
The government is pushing more & more labour costs on to the small employer – we already have to pay Employers’ National Insurance on top of wages, we need to provide a pension with contributions from next tax year, and must fund sickness benefit claims (of course on top of replacement staff costs). Not sure the local GPs fully know that it’s no longer the Government picking up the bill when they issue sick notes….
3/ Red tape
What we never guessed was how much of our precious bread sales would be absorbed by admin – nothing is free or value-added for a small business. Here’s some of the costs we have to fund:
- bank charges. Hundreds of pounds every month on contactless & card payment fees; a fee for every deposit & every payment, this would all be free of charge in your home bank account. We need to sell a lot of baguettes to cover just those!
- Business rates. Somehow our shop is charged more thousands of pounds every year than any other shop in the parade, and the rateable value set by some quango or other appears to be unchallengeable. Some bakeries have lost their discount in other parts of the country, which could be the difference between profit and loss, staying in their shop or choosing to go elewhere for them. Note – this is just a tax on being in business, that the local council collects & passes to central government. It provides NO VALUE EXCHANGE WHATSOEVER to the business paying it.
- Waste disposal. Whilst we have a fantastic arrangement with both the Epilepsy Centre & a local pig farmer to reuse our leftover bread each day, we have a lot of process-production & packaging rubbish, all the time. No friendly council bin men to pick it all up unfortunately, instead this is a big money spinner for companies like Grundon. New statutory recycling & waste limit targets mean that we have seen our waste collection fees rocket to thousands of pounds per year and we have become zealots about our bin systems to try to contain them.
- Our business is governed by rigorous local inspectors & councillors. We even had to pay hundreds in a retrospective “planning fee” just to site a couple of tables & chairs right outside of our shop on warmer days…
Now. Have we put off anybody out there from opening up (yet another) food business anywhere near the Parade hahaha?? But never fear, we have invested a LOT – money, time, effort, heart, heads… into No 4 Chenies Parade to recoup, so we’ll just carry on rolling with these many costs & pressures. All the time that our many & lovely Friends of Rex come looking for Real Bread, we will proudly continue to be in a similar price range of other premium, healthy foods.
Given our ingredients are undoubtedly much higher quality than other local food businesses, this means we will continue to offer outstanding value to shoppers. Hope this gives you some insight to the challenges of balancing the books in Rex – and how we NEED & thank you for your continued support more than ever before!!