Rising interest rates are a blessing in disguise for bakery businesses, according to Plimsoll’s latest research into the UK bakery market.
With more than a quarter of bakery companies in more debt than ever, rising rates could act as a useful "wake-up call", said David Pattison, senior analyst at Plimsoll.
Many bakeries "have been enticed by low interest rates" and the "lure of easy debt secured on rapidly rising property prices, and so have been able to cover up flaws in their business strategies - effectively buying time", said the report. If they reduce their level of debt and streamline their business models, they may have a future, it said. The report advises struggling companies to take action now before further rises are announced.
Rising rates should help bring stability to the UK bakery market, according to Pattison.
Plimsoll comprises experts in industry analysis, which help companies to understand their performances and that of their competitors.