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The rising cost of energy is an issue on the minds of small businesses all over the UK, and for the boss of one independent coffee shop in Alderley Edge, it’s an issue that demands constant attention. Anna Williams, the owner of Nook & Cranny, says that other than rent, energy is now the biggest fixed cost the business faces – especially when the winter months set in.
A Nasty Surprise
Anna took over the business two years ago – her first business venture – but went into the challenge having done her research about what running a coffee shop would involve. Based on the previous owner’s spend, she factored in energy costs as part of her initial business plan, even building in a 25% buffer to allow for price increases. But that buffer was quickly tested...
“When we first moved in, we were put on an emergency tariff without realising, and our first bill was eye-watering - over £4,000,” she says.
“It became a top priority very quickly, and we needed to switch our tariff to make sure our energy costs were more manageable. We did our research and looked at the options available to us, and we switched straight away.”
Moving to a Fixed-Rate Contract
Anna moved to a fixed-rate contract with supplier Yu Energy and is now paying 26p per kilowatt hour plus VAT. The agreement is reviewed annually, with the next review due in January.
On average, Anna says the café now spends more than £400 a month on electricity alone. This covers a wide range of equipment, from the energy-intensive coffee machine and oven to the fridge, freezer, toastie machine, and an ice machine used year-round for iced drinks.
Anna said: “We’re in a very small building, so £400 is a sizeable amount for us, but I feel fortunate we made the switch. I know there are lots of other companies locked into contracts or overpaying without even realising.
“There’s a lot of equipment needed to run a coffee shop, and pretty much everything needs to be on and ready for a customer. We invested in the ice machine this year, but again, that costs money to run, and even when the weather isn’t as hot, we still see demand for iced drinks.”
Winter is Coming
Winter brings added pressure for Nook & Cranny. The heating has to be kept on all day to keep the older building warm, regardless of footfall. December, when people shift their spending toward gifts and social events, can be particularly quiet.
“When it’s quiet, the heating still has to stay on,” added Anna. “We can’t simply turn the heating on when people are in.
“December can be a bit quiet for us, so I’m always mindful of that. But I’m very lucky we have built up such a fantastic customer base in the local community – some people even visit us every day – and that really helps offset the quiet weeks.”
With minimum wage increases, National Insurance rises and growing costs from suppliers, there’s a constant balancing act between keeping the business sustainable and remaining affordable for customers.
Energy-Saving Measures
To help manage this, Anna has introduced several energy-saving measures. The café’s lighting has been upgraded to energy-efficient bulbs throughout, and she closely monitors usage via meter readings. She’s also created a detailed spreadsheet tracking how much energy each piece of equipment uses and how much it costs to run, regularly reviewing appliances to see where savings can be made.
“I’m very conscious of the impact of ageing equipment, and by tracking things, I can think about when it might be time to replace or upgrade. I’m currently considering replacing the coffee machine, as it’s a few years old now, and I think I could get a less energy-intensive alternative that would reduce my energy costs and avoid increasing costs. So it can be a win-win if it’s timed right.”
Anna is open about the challenges but is keen to share lessons learned with other small business owners. Her advice is to review energy contracts regularly, track appliance efficiency and resist the urge to settle for the first tariff offered.
“Running a small business comes with pressure from every angle, but you can stay on top of energy costs if you stay informed and make time for regular reviews. There is a lot of good advice out there, but you need to take the time to look properly and also consider all the options, as I think it’s unlikely we’ll see energy costs coming down significantly.”
Business Energy Calculator
One tool available to small business owners is a new hospitality energy consumption calculator. The interactive tool lets hospitality business owners assess their energy costs based on the number of appliances they have, enabling more accurate estimates and comparisons with other businesses in their sector.
For now, Anna feels as ready as she can be for another winter at Nook & Cranny.
“It’s only possible to control what you can, so I try not to think too much about the weather or rising costs – I just monitor them and work as hard as I can on making my business the best it can be. Running a coffee shop with a purpose, staying resilient, and continuing to offer a warm, welcoming space for my local community is what makes me happy and gets me up every day.”
For more information and guidance on hospitality business costs, visit the Business Comparison energy hub.
