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20
Jun
Businesses and the U.K. Cost of Living Crisis
A perfect storm of rising inflation, global supply chain disruptions, and the ongoing war in Ukraine is squeezing U.K. businesses from all sides. A recent study by PayPal revealed that ¾ of U.K. business owners fear the cost of living crisis will significantly impact their operations.
The Squeeze on Profit Margins
- Fuel Costs: The soaring cost of diesel prices for commercial vehicles directly affects businesses reliant on transportation and logistics. Even for businesses without a delivery fleet, rising fuel costs indirectly impact employee commutes and supply chain operations.
- Energy Bills: Nearly 40% of business owners cite energy price hikes as a major threat. With gas bills for small and medium businesses rising by an average of 250% in the past year, maintaining healthy cash flow becomes a significant challenge.
- Employee Retention: With inflation outpacing wage growth, attracting and retaining talent is becoming increasingly difficult. A recent report showed a record number of job resignations in the last quarter of 2021, with many employees seeking opportunities with better pay and benefits.
- Transportation Costs: The TEG Road Transport Price Index shows a 15% year-on-year increase in the average price per mile for haulage and courier vehicles. This significantly impacts businesses that rely on transportation to function.
The Ripple Effect of Inflation
The war in Ukraine has disrupted exports of essential commodities like metals,
food, oil, and gas. This has driven inflation to levels unseen in decades. Ukraine and Russia are major suppliers of energy and agricultural products, and the war-damaged production facilities have caused core products like wheat, fertilizers, and gas to skyrocket in price.How Masters is Adapting
As we’ve mentioned, inflation ripples through the supply chain, pushing costs up across the board. At Masters, we’re committed to transparent communication with our customers. We’ve implemented cost-saving measures and continuously monitor fuel surcharges, aiming to reduce them whenever possible.
Are you a business owner struggling with rising costs?
Contact our logistics experts today for a free consultation on optimizing your supply chain.