FOCUS: The struggles facing small businesses

The struggles facing small businesses in Jersey is now even “worse than during the pandemic”, say local owners.

In the past few months several businesses have announced they were closing down or are up for sale.

This includes painting and decorating shop, Decorare Jersey, which announced at the end of last month that it was “hanging up its paint brushes”.

It has also recently been revealed the Jersey Roseville Cafe on Halkett Street – which is not their main bistro restaurant – is up for sale.

Express spoke to small businesses to find out why things are so difficult, six years since we were plunged into a lockdown.

The knock-on effect of the high cost of living

The first problem isn’t unique to the island – prices are going up, whether that’s regarding food, rent or energy bills.

Latest figures show that prices for goods and services in Jersey were 2.8% higher in December than a year ago.

This, local businesses say, means people have less disposable income to spend on small businesses, resulting in a decrease in demand.

The owner of Lots for Littles, which sells personalised children’s clothing and gifts – and is not closing – described the impact of this problem on her business.

Many families, including us, are already feeling the pressure of the high cost living, from increasing bills to expensive foods,”

she said

“Personalised children’s clothing is a luxury rather than a necessity, so reduced disposable income directly affects my sales.”

Similarly, The Bean Café, which is deciding whether or not it will re-open, recently highlighted this problem.

Its owner, Joe Pinzari, recently also said: “I know that people want to support small businesses, but customer habits have changed. A lot of people are struggling themselves.”

The high operational costs

There are also significant operational costs that can make it hard to turn a profit – whether that is bills, rent or supplies.

For example, the co-owner of Jersey Roseville Cafe and Roseville Bistro, Roxana Hinui, said their gas bills at the main bistro restaurant are now 50% higher than they used to be.

Then, there is also the issue of high rents in Jersey, which Debbie, who ran Decorare Jersey with her husband, said is exacerbated by limited choice of premises.

She explained it led them to sign a nine-year lease – which went on to lead to difficulties which contributed to their decision to close.

They, among others, have also seen their prices from suppliers increase for a variety of reasons, during different periods of time.

The cost of shipping to the island

The cost of shipping to the island for small businesses is an ongoing problem.

It can be harder for small businesses to get good shipping deals than big companies who have larger orders, explained Debbie.

The 5% goods and services tax – which is applied to the total value of goods imported into Jersey, including shipping, insurance and packaging cost – also has an impact.

With GST added to each order, it increases the overall cost further, adding a significant amount on top of each delivery,”

said the owner of Lots for Littles.

These shipping costs are also being experienced by suppliers to small businesses, which has a ripple effect on their prices.

This is a problem the Roseville businesses have experienced, who say their suppliers have had to increase their prices due to shipping costs.

Their co-owner Ms Hinui said while the suppliers “are not to blame”, it still means their prices are going up.

The VISA process

There are several reasons the decision was made to put the Roseville Cafe up for sale, but one they particularly highlighted was staffing difficulties.

“One of the reasons is that finding staff has been a massive struggle for us since Covid,” said Ms Hinui

The difficulty as, she explained, comes because “most hospitality owners have to look outside of Jersey for staff” which means they have to go through the visa process.

For example, they said they “thought it was going to take six to eight weeks for a visa” for one of their staff, “but turned out to be more than three months”.

The visa process can also be “expensive”, she said as they sometimes have to pay for it for employees who cannot afford it.

A spokesperson from Jersey Customs and Immigration Services said they’ve been made aware of the concerns raise by the business owners regarding the visa process

They added while they cannot discuss individual cases publicly, they have sought information in order to be able to respond in more detail.

If anyone is concerned they said their service is “always happy for anyone concerned” to “contact them directly” and more information can be found here.

What is being done?

Economic Development Minister Kirsten Morel previously said the government has little control over food prices, which have increased in the UK and Europe since 2022.

While he said the government does not intervene with commercial rents, he added that he often speaks with landlords to make sure they work with small businesses.

He added that the government is working to reduce “red tape” for small businesses and that The Better Business Support Package is in place.

These grants offer 50% matched funding, up to the value of £75,000 for eligible organisations to support projects aimed at improving productivity and skills.