High number of small retailers on the brink of collapse, report warns

High number of small retailers on the brink of collapse, report warns
FSB chairman Mike Cherry said the development of business support measures had not kept pace with intensifying restrictions caused by the Covid pandemic. (Image: PA Wires)
// At least 250,000 small businesses set to go out of business without further help, FSB warns
// Survey of 1400 small businesses, including retailers, suggests a record number planning to close over the next year
// 58% of small businesses forecast a reduction in profitability for the coming quarter

Small and independent retailers are among the at least 250,000 small businesses that are set to go out of business without further help, a new report has warned.

The Federation of Small Businesses (FSB) said its research showed that one in five smaller companies cut jobs in the three months to December, and one in seven expect to do so in the coming quarter.

A survey of 1400 small businesses, including retailers, suggested a record number were planning to close over the next year while exporters were feeling the strain as a new EU-UK trade deal beds in.


READ MORE:


The proportion of small businesses forecasting a reduction in profitability for the coming quarter has “spiralled” over the past year to an all-time high of 58 per cent, the FSB’s report said.

Half of exporters expect international sales to drop in the next few months, up from a third this time last year, the study indicated.

FSB chairman Mike Cherry said the development of business support measures had not kept pace with intensifying restrictions caused by the Covid pandemic.

“As a result, we risk losing hundreds of thousands of great, ultimately viable small businesses this year, at huge cost to local communities and individual livelihoods,” he said.

“A record number say they plan to close over the next 12 months and they were saying that even before news of the latest lockdown came through.

“At the outset of the first national lockdown, the UK Government was bold. The support mechanisms put in place weren’t perfect but they were an exceptionally good starting point. That’s why it’s so disappointing that it’s met this second lockdown with a whimper.

“There are meaningful lifelines for retail, leisure and hospitality businesses, which are very welcome as far as they go, but this government needs to realise that the small business community is much bigger than these three sectors.

“Company directors, the newly self-employed, those in supply chains and those without commercial premises are still being left out in the cold.”

A Business Department spokesman said: “We understand these are extremely challenging circumstances for businesses, which is why we have put in place one of the most comprehensive and generous packages of business support in the world worth £280 billion.

“This includes a new one-off grant worth up to £9000, VAT relief, various loan schemes, a business rates holiday as well as the extended furlough scheme.”

with PA Wires

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

LEAVE A REPLY

Please enter your comment!
Please enter your name here