Doubling electricity prices will mean job losses as well as price increases, say retailers

In many cases, retailers are facing a doubling of monthly electricity bills.

Sophie Towers, who runs Kibble One Stop in Burnley, Lancashire, says that her electricity contract, which must be renewed next week, looks set to go up from £1,250 to £2,565 per month.

Despite having tried to get a better price through several brokers, that is the best price she has been able to get so far.

Putting up prices to cover the increase is not a realistic option, she says, both because it will make her uncompetitive with stores nearby and because One Stop has restrictions on price rises.

She says: “We can’t pass all this on to customers, so the only realistic answer is staff losing jobs.”

Towers employs 10 staff at the store but has not yet worked out how many staff will have to leave.

She believes that the government should help with a solution to the energy price issue and points out that if something is not sorted out immediately it will not help, because by next week she will have to sign “a two or three year contract” for electricity supply.

One of the issues for businesses is that the government has so far appeared keener to guarantee a price cap on domestic energy supplies while leaving the market to sort out the increased cost for business.

Jithesh Patel, owner of the Choc Box, in Chessington, Surrey, says that his energy contract doesn’t come up for renewal until January, but that he is expecting an increase when it does.

Patel, who is independent of any symbol group, says: “The problem with all these things is that it is just a matter of time.

“Costs are going up, so for the independent retailer it becomes a question of whether you maintain your margins and sell less, or cut your margin to maintain sales.”

A spokesman for the Association of Convenience Stores (ACS), said: “Members that are coming to the end of their contracts are looking around for other options but there aren’t many savings to be had and most are facing an increase.”

Iceland boss Richard Walker has been among others to warn that higher energy bills and other costs meant price rises were now “inevitable”.