Record number of small businesses looking to shut shop

830
Secondary revenue

A record number of small businesses faced downsizing or closure throughout the end of 2017, as sluggish demand and rising operating costs batter the industry.

According to a new survey published by the Federation of Small Businesses (FSB), 14 per cent of small businesses are now expecting to scale down or stop trading, with retailers among the least optimistic.

A further 75 per cent reported rising operating costs over the first three quarters of 2017, while the FSB’s confidence index dropped into negative territory for the second time in five years.

Inflation and wavering consumer demand have meant 41 per cent of small businesses surveyed reported a fall in profits.

Nearly a third of companies expect their performance to continue its downward trend into the next quarter.

“While the swift agreement of a transitional arrangement and an ambitious free trade agreement with the EU are absolutely critical, it’s spiralling costs, weak growth and flagging consumer demand at home that are front of mind for small firms day to day,” FSB chairman Mike Cherry said.

Click here to sign up to Retail Gazette‘s free daily email newsletter

3 COMMENTS

  1. For small retailers it is rising or high operating costs that are causing problems. Even if the store is just owner operated, having covered the costs of rates, rents and utilities, it is difficult to make enough profit for a decent wage for the owner. Local authorities and property owners need to realise that to maintain any sort of retail health and diversity in a town, the costs need to fit the market. Otherwise we will continue to see retailers giving up – too hard, not enough reward.

  2. I think the situation this year may will vary more across the UK as; for example, Wales now has less roughly a 50% less genourous small business rate relief than England. The shop that own in Wales for example would pay zero rates in England, a saving of 3k. pa.

  3. The comment from Steve Myatt identifying some of the issues facing independent retailers today is spot on. Unfortunately neither local authorities or property owners are going to reduce their charges as they are geared up to a level where-by any reduction in income is going to cause them to have to find savings elsewhere. Make Landlords pay the rates and BID charges when the units are empty and you may see them start to become more flexible when it comes to rent negotiations.

    We all know levelling the playing field of parking charges between out-of-town shopping centres and in-town would help a great deal, but sadly this too seems to be wishful thinking unless you are in Witney. So often when dealing with customers for shoes which takes a bit of time, they are looking at their watches to ensure they don’t get back to their cars after the time paid for. Modest half day and day rates would encourage people in to town as well as encourage them to stay longer to eat as well as shop.

    While on the topic of out of town shopping centres, why is it that even when a town centre is struggling to survive, even with a prestigious in-town modern shopping centre, permission is given for not just one but two massive out of town shopping centres. I cite Banbury as an example, where the District Council have even had to step in save Castle Quay, the in-town shopping centre given the town is know on its knees. A good example of chronic poor local government strategic planning

    I suspect if all independent retailers could walk away from leases tomorrow, the majority would.

LEAVE A REPLY

Please enter your comment!
Please enter your name here