The UK economy and small businesses

ended 11. February 2022

This morning, the Office for National Statistics published the GDP data for December. GDP increased by an estimated 7.5% in 2021, following a 9.4% fall in 2020, but it didn't hide the fact that the Omicron variant savaged the retail and broader services sector in December.

As ever, the vast majority of major media outlets have quoted macroeconomists rather than real businesses, many of whom are really struggling right now and need to be heard. 

The comments below from Barry Whitehouse who runs an art shop in Banbury, is more powerful than any of the abstract jibber jabber spouted from the city this morning, but the media in all their blindness cannot see it:

"Footfall is visibly lacking in store and in town, and to be honest for the first time I am worried for the future of my shop. Takings in December were around 15% down on the previous December but January and February to date have also been quiet. January was around 50% down on pre-pandemic levels and has left me wondering if I’ve just had my last Christmas as a bricks and mortar retailer."

Another powerful quote came from Jenny Blyth, who runs a gift company, but has it been used yet? Has it hell. "The day-to-day running of our small business is now like wading through treacle and we are fighting a tide of bad news in the form of rising energy bills, inflation and taxes. We were pleased that heading into January our sales were steady but as the cost of living crisis heightened, our sales have nosedived."

And then there's this corker from Dr Jackie Mulligan SFIPM. Again, no-one has run it yet. Why would you when you can quote an economist in a think tank or bank earning £300k+?

“The Omicron variant absolutely decimated trade in December for countless high street retail businesses. The result is that many, sadly, are now struggling to survive. To make matters worse, inflation is hitting small high street businesses from all angles. Customers have less to spend, raw materials are costing more, supply chains are being squeezed, interest rates are on the up and the cost to heat their premises is skyrocketing. We estimate that at least a third of businesses on the high street will be relying on Valentine's Day to help them address the losses they experienced over Christmas."

The media are so out of touch it's frightening. They need to start quoting real businesses and engaging with real people or they'll never stop the rot.

More quotes from real businesses below. 

13 responses from the Newspage community

Star Quote
"December was absolutely dire for us. It’s usually our busiest month of the year. January, by contrast, was our best month ever, with a massive increase in the number of people wanting to save money on their everyday spending. Almost certainly this is down to rising inflation, energy bills and interest rates. Our business helps people to save money on their everyday shopping and so is proving quite popular in the current brutal climate. February started off very slow with employee benefits, which is our biggest seller normally, surprisingly low. I think with people working from home it’s been harder for us to reach decision makers. I am still positive, as I think that people want to support small businesses more than ever."
Star Quote
"Footfall is visibly lacking in store and in town, and to be honest for the first time I am worried for the future of my shop. Takings in December were around 15% down on the previous December but January and February to date have also been quiet. Rising prices and falling footfall mean much lower takings. January was around 50% down on pre-pandemic levels and has left me wondering if I’ve just had my last Christmas as a bricks and mortar retailer. I seriously hope not and will do all I can to soldier on. My only hope is that the lighter evenings and warmer spring air will bring more people out shopping again."
Star Quote
"I’ve been advising businesses around the world for 35 years, guiding them through recessions, epidemics, civil unrest and the Covid pandemic. As a small business owner, I have never experienced such a quiet December with many projects cancelled or paused as clients revise budgets and review their financial projections against a backdrop of a struggling economy, increased interest rates and business costs. We have had a catastrophic start to the year. January and February have been the worst on record and with no government support the future now looks very uncertain. In the meantime, the Government are celebrating growth in 2021."
Star Quote
"Despite the economy growing by 7.5% last year, my sales have been down continuously since last March, and I know many of my other small business friends are in the same boat. "There will always be volatile times in retail and I just hope I have the stamina and skills to ride this rollercoaster out. "COVID was an anomaly that boosted a huge number of small businesses with a strong online presence. It created an array of opportunities for businesses to grow but that time has now passed and we are now suffering from a massive COVID hangover made worse by rising inflation, energy bills, taxes and Brexit. "People are no longer at home collecting furlough or deferring mortgage payments and as a result are not buying with the fervour they once did."
Star Quote
"We were lucky enough that, despite the Omicron variant, most of our December events were still running and people really loved the face to face contact of shopping. We were pleased that heading into January our sales were steady but as the cost of living crisis heightened, paired with Brexit border issues, a rise in National Insurance and a huge disruption in working hours for people off work with the Omicron variant, our sales have nosedived. The day-to-day running of our small business is now like wading through treacle and we are fighting a tide of bad news in the form of rising energy bills, inflation and taxes. Worst of all, we have nowhere to turn but to a government that is more concerned with its own pockets."
"December is always a strange one with lots of people taking time away from Zoom. The Omicron variant caused more operational problems than anything else with the last minute changes to guidance. I think we were all relieved for the switch off over the break, although the variant did impact a few staff over that time. January and February look extremely promising, enquiry rates are up year on year. The new ‘norm’ appears to be bringing back plans that may have been delayed in the last couple of years as staff are back to work and ready to push on throughout 2022. Whilst there’s uncertainty across many areas, specifically inflation, energy prices and whatever is going on next in Downing Street, a good business will always succeed. Great service is going to be more important that ever in a post-COVID world."
"With the end of restrictions within sight, I believe the retail sector has a growth spurt on the horizon. December was very strong but January was very average whilst businesses adapted to the Covid restrictions. We are hoping that the end of the stop/start COVID dance that has been with us for two years will help us crack on with our day-to-day business and start to thrive. Consistency for a small business is key and that's been sorely lacking over the past two years."
"Rising inflation, interest rates and price hikes across the board are far out-shadowing any effects of Omicron right now. Despite the service industry continuing to grow, it still remains significantly below pre-pandemic levels. As a small business owner within this sector, the decision about whether we should raise prices has now been made for many of us if we are to survive this coming year."
"It's been a strange start to the year, first doom and gloom due to Omicron and now spirits are high. Personally I have never had so many businesses and property investors coming to me looking for finance. Many of them are optimistic about the year ahead and hoping Covid has been finally kicked into the dustbin of history."
"During December and January we were fighting fit and well ahead of forecasts. Guests were booking their UK staycations with gusto, blissfully unaware of the financial climate lurking around the corner. We rely entirely on guests having enough disposable income to afford a holiday in Salcombe. The question is, how much pain will our client base feel with the various economical triggers, and will it stop them booking a holiday? It's bonjour to financial uncertainty for our business."
"December 2021 saw a bit of a quieter month in the world of property finance as potential borrowers put their comfy slippers on and got ready for a slap-up turkey dinner. Come January 2022 and it was back to the status quo with mortgage enquiries flowing in from all areas. The current climate of rising inflation, energy prices, interest rates, Brexit and broader geo-political uncertainty, affects us all. Those who are resilient and able to adapt will fare best and that's our plan. So far, so good."
"We're seeing mixed signals right now in our mortgage business. There's still plenty of demand from buyers. But in our conversations with clients, many are expressing anxiety about where house prices and mortgage rates are heading. Some are trying to buy now before rates increase further. Others are worried about buying at the top of the market, and that property prices could soon start falling, which is a view I personally share."
"December for us was fantastic, and despite having to close for Christmas orders back in October, we continued to be crazy busy. Again, January was super busy but February is off to a slower start but still steady away. We have never struggled with January like many businesses seem to do. I have no idea why but it's always one of our busiest months. We are fairly confident in our business right now, as we are in a real niche and things seem to be growing at a steady rate. We also have many loyal customers who have stuck by us throughout the pandemic. Brexit, however, and what it means, scares me. Businesswise, we have continued to deliver products around the world with no issues as yet but due to Brexit it's only a matter of time before we run into issues. It's tough to keep looking on the bright side at the moment. I think I speak for many of us when I say, it is an incredibly draining and uncertain time across the board regarding Covid, Brexit, the economy, energy prices and those ostensibly running the country."