Dec 11, 2020
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Christmas on a cliff-edge: 11% of small businesses could fail says new study

Dec 11, 2020

There’s the bleak prospect of permanent closure for 11% of local UK stores and businesses if what’s left of the season’s trading period isn’t a success, according to research by Simply Business.

Consumers urged to shop locally, report finds

A further 14% would have to shut temporarily and 15% would need to consider other forms of employment, the small business insurer said. And for those that do survive, 32% would need to put business plans on hold, it said.

Unsurprisingly, they're are expecting to bring in less money than usual this Christmas. On average, owners estimate they’ll take £2,164 less than usual, with 9% expecting to take between £3,000-£5,000 less.

The study of 230 small stores and businesses found that the Christmas period accounts for 28% of annual takings on average, but for 14% it can account for between 31%-40%. For 8%, the festive period usually accounts for a massive 61%-70% of annual takings. 

With many facing closure, money was found to be the greatest worry, with 75% reporting it as their biggest fear going into the festive period. Meanwhile, 50% are also worried about future lockdowns and not being able to reopen. Over a tenth (13%) are concerned about being unable to keep employees on after Christmas.
Overall, the study found owners are severely lacking in confidence, with 69% unsure about the future of their business. Some 77% of those placed in Tier 3 restrictions don’t feel confident about the future, compared to 57% of those placed in Tier 2, and 24% in Tier 1. 
With this in mind, 99% say it’s important for people to shop locally and support small businesses when shopping for gifts this year.
Alan Thomas, UK CEO at Simply Business, said: “Small business owners have been hit harder than most in this most challenging of years. The impact Covid-19 has had on their livelihoods and wellbeing is huge, and December is shaping up to be another difficult month". 

He added: “Small businesses are the backbone of Britain, and now more than ever it’s crucial we support them – by shopping with small and local businesses whenever we get the chance”.

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