A popular, award-winning cafe in North Yorkshire has closed, citing that the cost of the living crisis made operating too expensive to continue. 

The Velveteen Rabbit's Secret Garden cafe was located on Northallerton's South Parade, and despite only opening in April of this year, it had quickly established itself as a favourite for Northallerton foodies. 

Despite the cafe's popularity, and a recent feature in Living North after winning the Flavours of Herriot Country award for customer service, rising costs have made The Velveteen Rabbit unprofitable. 

Many patrons took to Facebook to express their grief that Northallerton's high street had lost a "genuine asset" and "a lovely little place". 

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Speaking to The Northern Echo, owner Ian Munro said: "The cafe went into liquidation on Friday, as with rising prices and the cost of living we were not doing well. 

"With it being such a small place, it often looked a lot busier than it was, but rising food prices, energy hikes, and paying staff wages meant we couldn't carry on.

"It is massively devastating for us and our staff - but our location in Great Ayton has remained open and is doing well."

Though two staff members have been integrated into the team at The Velveteen Rabbit's Great Ayton location, four more have been let go. 

The Northern Echo: The Velveteen Rabbit had established itself as an upmarket lunch spot in Northallerton.The Velveteen Rabbit had established itself as an upmarket lunch spot in Northallerton. (Image: Hannah Chapman)

Mr Munro said: "When big chains are shutting, some of us have no chance. Everything has gotten more expensive since the lockdown ended."

For many fans, the news that the cafe has shut has come as a surprise, as it was a popular spot.

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One person said: "The Food was amazing and the staff were so friendly, We went there for breakfast on our first morning after moving to Northallerton, and it was such a great start to living here."

Others highlighted that the cafe's tucked-away location may have negatively impacted trade - with some saying that it was too tucked away, or that they had not heard of it until after it was closed. 

One business owner said: "Rents are so crazy in Northallerton, along with increased energy bills it is so hard for businesses to remain viable.

"It was genuinely an asset to Northallerton and I hope the staff are relocated to the other cafe."

About reopening the Northallerton cafe, Mr Munro said: "We won't be considering opening another cafe yet, but will focus our energy on making the Great Ayton cafe a success."

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