Financial difficulties of small businesses in Ukraine
Small businesses in Ukraine are facing financial difficulties due to the need to spend on generators during power outages. These expenses can significantly affect product prices, particularly dairy products, meat, and bread, which have already seen price increases of 10-30% during the winter period of 2022-2023. It is projected that prices for products may increase by up to 30% in the event of 8-hour power outages.
Costs of generators and their impact on business
According to reports, an average café spends about 700 hryvnias a day on a generator, while a 'neighborhood' store spends around 350 hryvnias per day. With 4-hour power outages, generator costs amount to 10,440 hryvnias per month, and with 8-hour outages, the total rises to 20,880 hryvnias. In a photo lab, generator expenses can reach up to 6 thousand hryvnias per month. Such financial burdens can negatively affect the ability of businesses to maintain stable prices.
Experts indicate that if electricity is cut off for several hours three to four times a week, prices will rise by no more than 7%. However, daily 8-hour outages could increase food prices by nearly a third. According to the photo lab owner, people are already cutting back, and even a 10% increase in prices will change nothing except for loss of customers.
“People are already saving, and even a 10% price increase changes nothing except for loss of customers.” — Photo lab owner
Thus, small businesses in Ukraine find themselves in a difficult situation where expenses for generators during power outages can significantly impact prices, which in turn will affect consumers. The main reasons for price restraint remain relevant, and the further development of the situation necessitates careful monitoring and analysis.
Rising food prices in Ukraine pose a serious challenge for consumers and small businesses, as they are forced to adapt to new market conditions. Expenses on generators, which have become necessary due to frequent power outages, can lead to further price increases, thereby affecting demand. In this situation, it is important to keep an eye on changes in the economic landscape to respond timely to the challenges arising in the trade and service sectors.