South West

Small firms are the lifeblood of the region's economy but trying to keep a business healthy in the current economic downturn can be stressful and difficult.

When husband and wife team Elaine and Steve Ellis took over Victoria's Café in Paignton back in 2001, the business enjoyed a turnover in excess of £100,000.

It seemed set to provide them with a profitable business to see them through to their retirement.

Sign of the times - vacant shops.

It has been said that Torbay is one of the first areas to go into a recession and the last to come out.

The couple believe that the current economic downturn has hit Victoria's.

The area is largely dependant on tourism for its income but visitor numbers and spending have fallen to such an extent that by 2008 Elaine and Steve say their takings have dropped to just over £62,000.

The drop in takings has put them behind with their rent.

Now they are worried the café's leaseholder may decide to put a charge against their house having already sent the bailiffs in earlier in 2008.

Shutting up shop?

The couple are seriously wondering whether they are going to have to give in and shut up shop.

The couple employ a staff of three, all of whom have been with them since they took over the business eight years ago.

Vacant shops - hit by the credit crunch.

At the time of filming one was about to become a new father and Elaine cannot bear to think about having to let him or any of her team go.

They pay their staff a fair wage but cannot afford to take a wage from the business themselves so just take drawings of £150 a week.

They struggle on from day to day and say they haven't taken a holiday in two years.

The café still welcomes some of its regulars who have been eating there for 15 years and they have only good things to say about Victorias: "The food is good…", "…very good value for money".

But they too explain that when money is short, eating out and meeting for a coffee are some of the first things to go.

Economic downturn

Elaine has tried putting her coffee price up by five pence to try and increase the income a little, but eight of her customers couldn't afford the difference and stopped coming.

When we visit Victoria's Steve had received a VAT demand from HM Revenue and Customs for £5,292.27.

They fear that if the VAT office decides to take equipment to the value of the bill, rather than waiting until the couple can sell their home to settle the debt, they may as well declare themselves insolvent because they will no longer be able to trade.

Victoria's - a brighter future?

Steve says many businesses in the area have already had to go down this route.

According to Torbay Council there were 198 empty shops around the Torbay area by the end of 2008 - 20% more than in April 2008.

And January 2009 saw the end of Woolworths in Paignton and will also see the loss of Rossiters, a 150-year-old family-run department store close, with the loss of more than 90 jobs. 

Elaine takes us on a tour of the town centre to show us some of the many shops which have closed over the past year.

It's a vicious circle because as shops fall empty, fewer people are attracted into the centre and the reduction in 'footfall' affects the remaining businesses so that they eventually suffer too.

Brighter future

All is not gloom and despondency though.

By mid-January 2009 it looks as if things might be looking up slightly for Elaine and Steve.

The closure of one store may have proved to be a blessing in disguise.

Elaine wonders whether some Woolworth's café regulars, forced to look around for alternatives, have chosen Victoria's.

So Elaine and Steve are now looking ahead to Easter 2009 and hoping they can keep their heads above water until the next influx of visitors comes to give them another boost.