By Isle of Wight Observer
Phew, what a scorcher. When the sun is beating down, who doesn’t crave an ice cream? Last weekend was the perfect moment to head to Crave, in Ventnor. If you don’t already know, Crave makes the most fabulous ice cream. Unsurprisingly, there’s often a lengthy queue on sunny afternoons. Crave marries amazing, sometimes barely believable, combinations of delicious flavours, things no-one else seems to have thought of. If choosing just the right one seems risky, don’t fret; they offer free tasters. But that only makes the decision harder.
I’ve always loved ice cream and Crave does it properly – and served with a smile. But as you stand in that queue, watching children debate flavours it’s hard not to think, “This must be profitable.” A single scoop now costs £3.50–£4, and many of us don’t stop at one. When families buy a whole round, the total can easily reach £20-30 per visit.
My love affair with the scrummy stuff comes from childhood deprivation. I can still hear the chimes of the ice cream van drifting down our street, knowing full well I wasn’t getting one. Perhaps that’s why, as an adult, I developed a weakness for it. Shamefully, I used to buy a supermarket tub and demolish it in one sitting.
In America, I always seek out the nearest Dairy Queen franchise. ‘DQ’ sell the wonderful ‘banana split Blizzard’ which, frankly, is one of my all-time favourite treats. I much prefer it to beer.
What puzzles me is how American ice cream shops stay open all year, even in the coldest states. Yet here, where we’re hardly Arctic, we don’t seem to manage it. Warren Buffett, one of the world’s most successful investors, bought Dairy Queen decades ago. He’s missed a trick not rolling out the DQ franchise in the UK.
Some people drink; some gamble; many more of us have food issues – mine just happens to come in a cone. Last Friday, passing through Lymington, I stopped for a scoop. I mentioned last year that I was taken aback when the vendor asked for £4. This time, I wasn’t shocked – I’ve been educated by a YouTube video by the owner of Rossi’s Ice Cream Parlour in Southend. He broke down the economics of that £4 scoop – and it turns out the headline price is misleading. Take off the VAT, and you’re left with £3.32. His shop rent is £12,500 a year, and the business rates are £4,000. These shops run a lot of fridges, so the annual electricity bill is a whopper: £15,000. Staff costs are around 35 per cent of turnover, at £80,000 a year. The business brings in almost £300,000 annually, but after all those expenses, the owner is left with £1.82 per scoop – and that’s before buying the ice cream itself, or the cup or cone it sits in.
Most retailers spend between 45 and 80 pence on the ice cream alone, plus the cost of the cone. In round numbers, that leaves less than £1 of the original £4. And from that, the proprietor still needs to pay themselves and recover the cost of setting up the business: the fridges, the machinery, the bank charges, the accountant, the insurance. If, after all that, there’s any profit left, the government takes 26 per cent in Corporation Tax. How is that fair, when they didn’t invest a penny? In all successful businesses, the major beneficial shareholder is always the Treasury.
It’s difficult for small businesses to succeed, and it’s especially hard if your turnover is around £300,000 a year. So next time you’re asked to hand over £4 for an ice cream, remember the person scooping it won’t get much of the benefit; the government will.