Glasgow coffee shop says lowering VAT 'could help with cost crisis'

Graeme Crawford, managing director of Papercup Coffee in the city, has opened up to the Glasgow Times about the struggles facing the business amid the cost-of-living crisis as part of our ongoing Spotlight investigation.

The Papercup roastery was located on Belmont Lane for five years but mounting costs and a steep rent increase forced the business to move location and lose its coffee bar.

Graeme said: “We have lost a coffee bar, essentially a revenue stream, because it was a coffee bar and a coffee roastery.

“Now we are going straight to a coffee roastery which means we are losing a bit of revenue.”

A proposed rent increase that was untenable for the business was the catalyst for the move, Graeme claims.

The popular Papercup cafe is still open on Great Western Road, but that too has seen some changes in customer habits.

Graeme said: “We have definitely reduced our coffee sales.

“Like when a customer is coming to buy a cup of coffee on the way past, they don’t do that now, they maybe have it at home.

“I’m thankful to say that we have remained relatively level with food sales, so people are still going out for food as an option, the whole experience, but not necessarily spending a few pounds on a coffee to walk down the street.

“So, there’s a slight change in customer habits that I can fully understand.

“But it’s a really challenging time, it’s just really been a moving target for us.

“And thankfully we can be flexible enough that we can sort of make changes relatively quickly.”

He added: “We are lucky because we are very busy and very popular.

“We have great customers who have adjusted to our price increases.

“In the coffee roastery it’s different because you can’t just automatically have an increase against a market, it’s almost like you’re benchmarked yourself.”

Price increases at the roastery can take a few months to kick in because customers mostly buy their coffee beans in advance.

He said: “It’s been really challenging with the coffee roastery.

“We’re dealing with huge amounts of utility prices, then the rent increase, staffing costs have increased, and then the raw materials have increased, and it’s meant we have to look at other things.”

Graeme is happy with the new venue at SWG3 in Finnieston, but the move has disrupted his supply chain and negatively impacted his team and his customers.

He said: “The whole amount of time we will have to negotiate with all our suppliers. The biggest thing for us is we have a website, and the website drives people down for coffee pick-ups.

“We’ve lost a whole customer base essentially, because we were a mile and a half down the road, and they loved the locality of it.

“The biggest challenge is that locality has now been affected.

“We are in a different area now and we will have to build that business back up because there are so many people that enjoyed coming down to the West End location for the roastery and being able to pick up beans there.

“Our business loss makes now.

“I had to reduce someone’s hours this morning which is a very difficult conversation because we lost that coffee bar.”

The business has been hit with a 40% increase in the cost of utilities, an increase of around 25% for logistics, and its coffees have gone up by 30%.

A living wage increase, which Graeme supports, has caused labour to increase as well.

Any further price increases could lose the business customers, which would cause the business to lose more income and potentially be forced to cut more staff.

Graeme claims that a reduction in VAT could go a long way to helping the business.

He said: “That would allow us so much more freedom to mitigate the cost of utilities and staff and so on.

“For everything that we sell, we could sell cheaper, which means more custom, which means busier, which means being able to pay more bills a lot easier, making more money.”

Graeme added: “I actually thought getting through Covid was easier than it is just now.”