Iconic 119-year-old bakery dubbed ‘the stalwart’ of UK town SHUTS as owner slams Rachel Reeves for final nail in coffin
A POPULAR family-run bakery has announced it will pull down its shutters – pointing the finger at Chancellor Rachel Reeves for the business’ demise.
Lancaster’s Bakery in Harrogate, North Yorkshire welcomed in punters for over a century but have pulled the plug following a crippling increase in employer costs.
Lancaster’s Bakery has closed after 119 years in business[/caption] The owners blamed Chancellor Rachel Reeves for the store’s closure[/caption] Rachel Reeves’ tax raid on business is already flattening job opportunities, with the sharpest fall in vacancies since the Covid pandemic[/caption]The owners broke the news to loyal customers online.
“It is with the greatest regret that we are closing Lancaster’s Bakery from Saturday, February 1 after 119 years in the family,” they wrote.
“The last couple of years have been very challenging with rising ingredient costs and utility bills, but the Budget increases in employer costs has made the situation even worse.
“Added to all these increases is the reduction in Business Rate Relief for small businesses.”
It follows Reeves’ first Budget in October, which was dubbed “the most damaging for independent retailers in recent memory” by the British Independent Retailers Association.
The Chancellor controversially announced tax rises amounting £40billion – including raising the rate of employer National Insurance contributions.
This, alongside increasing minimum wage, has hiked costs for retailers and led some to raise their prices to absorb the increase.
Figures this month showed bosses had wasted no time in pulling permanent recruitment adverts, with December seeing the steepest drop in job vacancies in well over four years.
A closely watched report by KPMG and REC, compiled by S&P Global, shows the job market is already shrinking, with companies explicitly blaming the rise in employer national insurance contributions.
Some have been making redundancies in December, according to its survey of 400 recruiters.
As well as homeware businesses, supermarkets have also been hit – with fruit and veg prices at risk of soaring.
Harrogate and Knaresborough MP Tom Gordon doubled down on condemning Reeves’ budget, adding that local businesses are being “hit hardest” by the changes.
“It’s so sad to hear the news of Lancaster’s bakery closure,” Gordon said.
“They have been a stalwart of the town for 119 years.
“The changes in the Budget were ill-thought through and didn’t treat businesses as partners in the growth the Government claims it wants to see.
“I’m concerned that small, local and independent businesses are being hit hardest.
“They are the lifeblood of our economy and important to local communities.”
What other retailers have been forced to close stores?
ShoeZone was one of the first retailers to blame the Budget for store closures.
The chain has begun to close “unviable” branches after its costs increased.
It said: “These additional costs have resulted in the planned closure of a number of stores that have now become unviable.”
Meanwhile, WHSmith has confirmed it will close 18 shops for good in the coming months.
The retailer is focusing on the travel side of its business, where sales are growing.
In an update this year to investors the company said it is on track to open 15 stores this year, with a further 15 to follow “each year over the medium term”.
The company said it will be moving away from its high-street stores and has no plans to open any more.
Meanwhile, Homebase will close 13 stores this month after it fell into administration in November.
The company will shutter shops in Cheltenham, Coventry, Romford and Wolverhampton.
RETAIL PAIN IN 2025
The British Retail Consortium has predicted that the Treasury's hike to employer NICs will cost the retail sector £2.3billion.
Research by the British Chambers of Commerce shows that more than half of companies plan to raise prices by early April.
A survey of more than 4,800 firms found that 55% expect prices to increase in the next three months, up from 39% in a similar poll conducted in the latter half of 2024.
Three-quarters of companies cited the cost of employing people as their primary financial pressure.
The Centre for Retail Research (CRR) has also warned that around 17,350 retail sites are expected to shut down this year.
It comes on the back of a tough 2024, when 13,000 shops closed their doors for good—already a 28% increase on the previous year.
Professor Joshua Bamfield, director of the CRR said: “The results for 2024 show that although the outcomes for store closures overall were not as poor as in either 2020 or 2022, they are still disconcerting, with worse set to come in 2025.”
Professor Bamfield has also warned of a bleak outlook for 2025, predicting that as many as 202,000 jobs could be lost in the sector.
“By increasing both the costs of running stores and the costs on each consumer’s household it is highly likely that we will see retail job losses eclipse the height of the pandemic in 2020.”