For several months now, the cost of living crisis has placed unprecedented financial pressures on both businesses and individuals across the UK. The additional energy crisis has further exacerbated the struggle to remain afloat, particularly for businesses that need to keep their premises heated despite energy costs rising over 54% since 2021.

Whilst the government has introduced the Energy Bill Relief Scheme – fixing the wholesale unit price of gas and electricity suppliers can charge businesses – many have continued to feel strained by the combination of crises affecting the UK, with some taking more drastic measures to keep their costs lower.

Many smaller, family-run businesses – including pubs, restaurants, and cafes – have opted to start closing earlier if customers show no signs of coming in. Others, according to a survey by financial experts at NerdWallet, had increased their prices to offset costs onto their customers (43%).

Connor Campbell, business finance expert at NerdWallet, comments:

“It has been a tough year for small businesses in the UK, and with winter in full swing, the pressure to keep buildings heated despite high energy prices has resulted in many business owners having to make difficult decisions to keep their businesses afloat.

“The period leading up to Christmas is often one of the busiest times of the year for high street vendors, but the cost of living crisis has meant that many consumers simply cannot afford to spend as much money this year.

“This has had a knock-on effect that has seen many smaller businesses on the high street suffering financial losses, with even major shopping events such as Black Friday failing to increase high street spending.

“It’s disappointing but unsurprising to see that some businesses, particularly those in hospitality, are closing earlier if they seem unlikely to get much patronage. Heating their premises will only be worthwhile if they bring in enough business to offset the costs of their energy bills.

“When we consider that, during the height of the pandemic, the number of businesses in the UK actually grew by 14%, it’s interesting to see just how quickly things can change.

“Going into the new year, the high street may look a lot different to previous years with only big names remaining open if more targeted support isn’t put in place to help small businesses and sole traders withstand the strain of both the cost of living and energy crisis.”