Family-owned bakery chain Coughlans Bakery, which is part-owned by comedian Romesh Ranganathan, has ceased trading with around 175 jobs expected to be lost.

The business, which was founded in 1937, has closed all 31 of its stores across south London, Surrey, Sussex and Kent after nearly nine decades of trading.

Managing director Sean Coughlan said the decision to place the company into voluntary liquidation had been taken to ensure staff and suppliers could still be paid, describing the closure as “heartbreaking”.

Coughlan blamed a combination of rising employment costs and falling sales because of prolonged heatwaves for the collapse. He said April’s increases in employers’ national insurance contributions, higher minimum wages, and business rates had significantly increased operating costs, while fuel bills had doubled following the conflict in the Middle East.

Together, he said, those pressures had added around £20,000 a week to the company’s costs.

“The rates have absolutely smashed local business,” Coughlan said, adding that recent heatwaves had proved to be “the nail in the coffin”.

He said temperatures of up to 35°C across south-east England had dramatically reduced customer numbers, leaving the bakery taking around half its usual weekly revenue while fixed costs remained unchanged.

“No one really seemed to come out,” he said.

Ranganathan, who became a co-owner of the business in 2024 after initially supporting its vegan range, said he was “gutted“ by the closure. Coughlan praised the comedian’s commitment to the business, saying: “Everything he’s done, it’s been from the heart.”

Meanwhile, new research by the British Institute of Innkeeping, UKHospitality, the British Beer and Pub Association and HospitalityUlster has found that nearly a quarter of pubs, restaurants and cafes are loss-making.

The industry bodies say they have warned potential new prime minister Andy Burnham over the gravity of the situation. The figures show that the number of hospitality venues losing money has risen to 23%, up from 15% three months ago.

High costs mean that one in six businesses are at risk of closing in the next 12 months, prompting fresh calls from employers for a VAT cut.

Operators cited energy, wages, national insurance contributions, food, beer duty and business rates as the primary causes of the problems they face and say they have had to cut operating hours and numbers of staff.

Many have slashed their operating hours and say they are unable to hire staff – particularly younger, less experienced workers – due to the high costs of labour.

Yesterday, the Republic of Ireland cut its VAT rate for hospitality from 13.5% to 9% (Wednesday 1 July).

Burnham has already pledged to cut business rates and said on Monday that high streets could become “a symbol of Britain’s renaissance.”

The government earlier this month said it would reduce the VAT rate to 5% for children’s meals, family admissions to visitor attractions and children’s soft play between 25 June and 1 September.

But industry chiefs say this must be extended more widely to other businesses and permanent change is needed.

 

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