· 2 min read · Features

The business issues that keep me up at night


I come from a family of world-class insomniacs. It’s a condition commonly found among supporters of Arsenal Football Club, so I am no stranger to sleepless nights.

Of course, most of the problems that exercise my mind in the wee small hours are connected with business. RH Amar is a third-generation family company supplying fine grocery products to British retailers and caterers. With a payroll of 60 people and a turnover somewhat above £50 million, we are a small company compared to most of our customers and we operate in an extremely competitive sector. My own career spans half a century - I joined the firm in 1960, days after I came down from university - so you might think that I would leave the worrying to my son and our very experienced management team. Not so - in the autumn of my career, I still worry about matters over which I have no control.

There have been plenty of such questions in the past few turbulent years. At the time of the financial crisis two and a half years ago and the subsequent onset of recession, we had concerns that the speciality food business would be seriously damaged. At that moment, the word on the street was that consumers would be trading down, supermarkets would major on 'value' ranges, discounters would flourish and our high-quality foods would vanish from the shelves. Interestingly, that concern lasted only a few months. By Christmas 2008, it was clear that fine foods were alive and well - sales were actually increasing. It bore out my father Raoul's oft-quoted maxim that in hard economic times, when consumers decide not to buy the new car or television set, they console themselves by buying top-quality food.

Around this time, another major problem surfaced and this one refuses to go away. I refer to the devaluation of sterling. We buy around 60% of our products from the Euro-zone and the pound has rapidly lost 25% of its value against the euro. Faced with much higher costs and the ability of powerful customers to resist price increases, this currency question was (and still is) a problem of epic proportions. This is not just something to disturb my sleep at 5am - this one worries me 24/7.

Today, with our currency problems rumbling on, a new problem is coming over the horizon. Inflation is a word we had almost forgotten, but I suspect it will now be front of mind for months or years to come. True, the British economy is in a depressed state. A new government is struggling to cope with the nation's huge level of debt, public expenditure is being slashed and unemployment already exceeds 2.5 million - but even in this environment inflation is with us again. I see it everywhere in our business - rising commodity prices mean higher raw material costs for our suppliers, packaging costs are going up, so are energy prices. The rising oil price affects our distribution costs on every case of product we sell.

As inflation eats away at disposable household incomes, we have to wonder what will happen to sales of the 1,100 quality food items stocked by our company. Will they only be purchased by hedge fund managers, or can we find the efficiencies in our business to ensure that these excellent foods still retain their appeal to a wide spectrum of consumers? Actually, I think we shall. Our company has been in business for 66 years. We have seen good times and bad, we have an experienced, resilient team and the products we sell are more wholesome and better-tasting than ever.

So even in the dead of night, when all these problems loom large, I can still convince myself that my father's message about good food thriving in hard times remains true… and that Arsenal will win next Saturday.

Henry Amar is chairman of RH Amar