Rising employment costs, spiralling business rates and high inflation are putting Britain’s independent retailers out of business.
According to government statistics, 2,197 retailers became insolvent in the 12 months until June 2018 – a rate of 40 high street shops every week.
The figure saw retail insolvencies reach the highest quarterly level for six years.
Commenting on the struggles facing small retailers, Mike Cherry, chairman of the Federation of Small Businesses (FSB), emphasised how a “perfect storm” of rising employment costs, spiralling business rates and high inflation and begun to wipe many off the high street.
“Some will have benefited from greater consumer spending throughout the World Cup and a scorching summer,” Cherry noted.
“For too many though, this hasn’t proved enough to survive on our high streets, where mounting operating costs are the norm.
Some retail experts have coined 2018 as the “year of the Company Voluntary Agreement”, after poor sales and high business costs saw a host of high street chains either reduce store headcount or fold altogether.
Overall, 50,000 jobs have been lost at UK retailers this year. In June 2018 alone, the announced closure of dozens of House of Fraser branches saw 6,000 jobs put at risk, while Poundworld’s administration threatened 5,100 jobs.
Read more on the current state of UK high streets:
- Traditional retail thinking isn’t working: It’s time to change now or shut up shop
- 5 ways aged debt has affected small retailers and how to stop it happening to you
- Barbershops, vapes and coffee: How independents are changing the face of UK high streets
Cherry added: “There are other factors at play here too – cuts to cash machine funding and the loss of thousands of bank branches in the last few years are hurting high street footfall all over the country.
“It’s a real concern to see almost 1,000 self-employed individuals suffering bankruptcies in the first three months of this year alone.
“The self-employed community, now 4.8 million-strong, is still denied basic support in too many areas. It’s time for the government to deliver statutory paternity and adoption allowances for these strivers.
“The government’s 12-month delay to abolition of the anachronistic Class II National Insurance system is coming to an end. An announcement at the Autumn Budget to remove this charge on the entire self-employed population, regardless of their income levels, would be a shot in the arm for millions of entrepreneurs.”
For independent traders in London’s East End, it’s business as usual. Same rent increases, same business rates hikes, same feeling of abandonment by policy makers. But they aren’t going down without a fight.
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