Christmas trading: 1 in 10 local businesses could face permanent closure in the New Year

By Helena Biggs | 11 December 2020 | Movers & Shakers, News

Closed Sign Woman Nails

According to research by small business insurer, Simply Business, local shops and businesses in the UK are on a ‘cliff edge’ with one in 10 (11%) facing permanent closure without a successful trading period this Christmas.

Local shops and businesses, including pubs, retailers and salons, are expecting to take £2,164 less than usual this festive season, with one in 10 (9%) expecting to take between £3,000-£5,000 less.

The Christmas period usually accounts for 28% of annual takings on average and the most recent national lockdown has left many local business owners feeling underprepared. 

Alan Thomas, UK CEO at Simply Business, comments: “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. 

“For many small businesses, the festive period is crucial to their annual takings – and with the frightening prospect of a quieter-than-usual December, one in 10 are on a cliff edge with permanent closure a real possibility.

“As we’ve seen on countless occasions throughout Covid-19, the self-employed are resilient, resourceful and innovative, and it’s encouraging to see many adapt their offering to help their chances – from offering takeaway services, to building online stores.”

“It’s clear that these steps can only go so far, and our research shows that success will be heavily linked to local restrictions.

“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.”

“With high streets officially reopening in Tier 1 and Tier 2 areas, this is a great opportunity for people to help support local communities. For those in Tier 3, using take-away services, small online businesses, and other safe delivery options can go a long way in supporting the self-employed.”

Overall there is a severe lack of confidence among local shop and business owners with over two thirds (69%) not confident about the future of their business, and almost all 230 small businesses surveyed say it’s important for people to shop locally and support small businesses this Christmas.

Over half (54%) of local businesses have been unable to plan or budget due to the uncertainty, well over two fifths (46%) have been unable to attract or market to new customers, and 28% have been unable to order stock. As a result, businesses have had to pivot and make changes to help them better prepare for Christmas. Almost a third (28%) have increased their advertising, a fifth (18%) have set up an online delivery service and well over a tenth (14%) have set up an online store.