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Newcastle Herald
Newcastle Herald
Business

City businesses reeling from energy prices

First there was COVID, then the downturn in trade caused by the Newcastle Mall redevelopment.

Now, cafe owner Lucy Glover's power bill has gone from $4300 to $5200 between June and September.

"We've had the worst two or three months ever. People aren't spending as much and, on top of that, the mall is going through big changes." Ms Glover, pictured, who runs Ka-Fey cafe said.

It's a recurring story across the Hunter's small business community, which is reeling from massive power bill increases in recent months on top of myriad other challenges.

Most are loath to pass on the increases to their customers, but with suppliers' costs also increasing there are few options.

"We have had to raise our coffee prices because all our suppliers have put their prices up. It's all we can do," Ms Glover said.

It's a similar story for Lake Macquarie cafe owners Rowell and Victoria Davidson who run Star Anise cafes at Belmont and Valentine.

Star Anise owner Rowell Davidson says he is holding off putting prices up for as long as possible. Picture by Marina Neil.

The business recently absorbed a 45 per cent power bill increase, which resulted in them considering their options with other suppliers.

"We had to pretty much threaten to go somewhere else before they agreed to renegotiate our account," Mr Davidson told the Newcastle Herald.

The business, which employs 12 staff, has also had to absorb the cost of cooking oil increasing from $42 to $91 then down to $63 a barrel as a result of the war in Ukraine.

"Everything has gone up, wages, insurance, electricity, everything," Mr Davidson said.

"Like everyone else, we have been carrying the costs because we don't want to put our prices up.

"But eventually we are going to have to. It's unfortunate."

NSW small business complaints to the NSW Energy and Water Ombudsman increased by 34 per cent between the 2022 financial year and this financial year.

But they dropped by 30 per cent in Newcastle and Lake Macquarie.

Complaints also dropped 17 per cent for the remainder of the Hunter.

Mr Davidson said he didn't have time to make a complaint.

"I guess we're not very proactive in that respect because we've got a thousand other things to worry about," Mr Davidson said.

"For us to actually negotiate with our supplier was a step forward."

Business Hunter chief executive Bob Hawes said the relatively low number of complaints from Hunter businesses may reflect a feeling of resignation about the rising cost of energy.

"The initial wave of bill shock passed some time ago and whilst businesses continue to experience increases in the cost of energy, the increases are now more predictable than was the case in previous years," Mr Hawes said.

The June 2023 Business NSW Business Conditions Survey results showed no businesses had switched energy retailers as way to mitigate cost increases.

"Businesses are staying put with their current provider and seeking to negotiate the best deal they can having considered or gone through the switch sometime in the last few years," he said.

"It also reflects a willingness of the retailers to negotiate to keep their customer base intact.

"There is also now a greater range of government support in the form of bill payment assistance and programs to help business move to more energy efficient modes of operation be it refitting or switching to renewables."

The Energy and Water Ombudsman is holding two free Lunch & Learn Webinars next week as a part of Small Business Month.

They are for small business owners or organisations working with small businesses, to learn about their energy accounts and how to get help if they're experiencing affordability issues.

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