// New Grimsey Report shows that borrowing for indie retailers through Bounce Back Loans estimated to be £1.7bn
// Before the pandemic, borrowing figures stood at £483m
// This means indie retailers now owe four times as much as they did one year ago and were now at risk without gov’t help
Independent retailers face a “mountain of debt” after taking on Covid support loans during the pandemic and now need government help to survive, according to an influential independent review.
According to the latest Grimsey Report titled Against the Odds, conducted by former Wickes and Iceland boss Bill Grimsey, small and/or independent retailers now owe four times as much as they did one year ago.
The report also states pre-pandemic borrowing for independent retailers was £483 million, with extra borrowing through Bounce Back Loans estimated to be £1.7 billion.
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The debt mountain had soared because small shops coped with the Covid-19 pandemic by taking on government-backed loans that would not normally have been granted, based on their finances.
Grimsey’s review calls for the government to write off some debt, and warned that without help the UK would a fresh wave of store closures and job losses this autumn.
“Our high street independents have experienced a new-found appreciation during lockdown,” Grimsey said.
“But they’ve also been forced to take on government-backed loans, which they would not have normally been able to get because their balance sheets wouldn’t allow it.
“Now they are struggling to manage a mountain of debt and need help.”
He added: “Britain is at a crossroads and the pandemic has brought about sweeping changes that will make a decisive break with a traditional high street model.
“But we can’t build our way out of trouble. To unlock the potential of our high streets, we need to focus on people, partnerships and communities as well.
“That means protecting small businesses. It means supporting a new breed of digitally savvy entrepreneurs and making high streets a testbed for new thinking.
“And it means promoting high standards and regulating key sectors such as hair and beauty.
“Britain needs a social recovery to lock in an economic one and our high streets should lead by example.”
The Treasury has said it was already providing further support and flexibility in loan repayment.
The latest Grimsey Report reviewed the published accounts of every UK independent business across the retail, services and hospitality sectors with total assets of £250,000 or less.
Last year, Grimsey said nearly half of retailers were in danger of “going bust” even before the pandemic, but a boom in online shopping had hastened the process, adding the “old high street is finished”.
with PA Wires