The head of the north-east bakery chain JG Ross has disclosed that the company is facing a potential increase in expenses of nearly £800,000 due to changes in energy and employment laws.
The rise in employer’s National Insurance contributions (NICs) and the increase in the minimum wage have been labeled as “additional financial strain.”
JG Ross commercial director Graeme Ross believes the changes will “increase the administrative burden to many businesses especially those in food and drink”.
Speaking to the Press & Journal, he said: “Like many businesses, 2023 presented us with a range of challenges, particularly from external factors.
“Rising costs across key ingredients, energy, and transportation put significant pressure on our operations.
“In addition, recruitment and retention of staff in a competitive labour market remained a priority.
“Economic uncertainty also affected consumer spending patterns, requiring us to remain agile in meeting changing customer needs.”
He was speaking as the company’s latest financial statements for the period ending March 30, 2024, reveal a drop in pre-tax profits from £1.3 million in 2023 to £1 million in 2024.
For the fiscal year ending March 30, 2024, the company’s revenue has grown to £16.4 million from £15.4 million in 2023.
The expected increase in National Insurance contributions (NICS) and the minimum wage is set to cost JG Ross an additional £700,000 annually. The average monthly count of employees, including directors, throughout the year was 311, an increase from 294 in 2023. The expenditure on wages rose to £5.7 million for the year compared to £5.2 million.
Cost of raw materials impacted trade and the end of a long-term gas contract is expected to see the renewal price increase by £65,000 per year.
Graeme said: “The retail environment remains challenging, and the increased costs associated with the National Minimum Wage and National Insurance contributions will only make things tougher in the short term.”
“Our primary focus, however, will be on strengthening and growing our existing business.”
JG Ross operates stores in cities such as Aberdeen, Inverurie, Alford, Oldmeldrum, Stonehaven, and Insch. Despite these challenges, there remains the possibility of expanding JG Ross bakeries throughout the north-east.
“While we’re not actively seeking new sites, we remain open to opportunities and would give any potential expansion serious consideration if it aligns with our long-term strategy.”
