Procurement · 26 June 2018

The East London traders fighting for their existence

East End micro businesses
Crescent Trading co-founders Martin White and Philip Pittack share 120 years of fabrics experience

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.

At a gathering of local traders and London Assembley members, brought together by the East End Trades Guild – a trade association fighting the corner of East London’s independent business owners – we heard first-hand of the challenges posed by towering overheads and liberal planning laws.

After Susan Hall, head of the Assembly’s economy committee and a former small business owner herself, asked Guild members what the biggest threats were to survival, two words drew a full consensus – rates and rent.

London business owners were hit hard in last year’s rates revaluation. 2015’s revaluation was the first since 2008, and firms were hit with bills that reflected seven years of rising property prices (around +33%).

Read more: Business rates – Why supermarkets win and London firms pick up the tab

Following rising property prices came rent increases from landlords, of which business owners feel powerless to challenge. Those present told stories of landlords happy to let buildings sit empty, despite assurances from assembly members that falling demand would see landlords inevitably reduce rents.

With the cost of typical overheads, such as parking permits and pavement signs, also increasing, business owners feel they are seeing fewer benefits for the extra money paid in rents and rates.

“I can’t see many of us surviving,” one said.

Traders also argued that the social benefit of their businesses had been ignored while property developers seemed to operate freely. The Assembly is inviting local business owners to submit their views via an online survey.

After business owners were given a chance to share their concerns with Assembly members – backed by the Guild’s director, Krissie Nicholson – Business Advice was taken on a tour of Bethnal Green Road and the back streets of Brick Lane to meet more the Guild’s members and hear about the challenges making day-to-day survival a struggle.

Holy Shot

Matthew Kim, owner of the Holy Shot café on Bethnal Green Road, echoed the sentiments of the roundtable.

Holy Shot founder Matthew Kim

“It’s unjustified how expensive rents are,” Kim said, noting the “aggressive and hostile” attitude of landlords towards independent businesses in the local area.

“In the time I’ve been here, a dozen [neighbours] have come and gone,” he added.

When asked what helped his own business thrive in the area, Kim attributed success to a high quality product offering, customer service and the high number of tourists (particularly using Airbnb) in the area.

 

Bacon Street Salvage

Off Brick Lane, Steve Dobkin, owner of Bacon Street Salvage for the past eight years, has seen his business rates go “up and up”. Rates have also forced Dobkin to reduce his workforce from five to two staff.

Bacon Street Salvage owner Steve Dobkin

While Dobkin is “lucky enough” to own his unit, the business next door was forced to close after 37 years after rent increased from £15,000 20 years ago to £107,000 in 2017.

Amid rising overheads, Dobkin’s relationship with the local council has almost reached breaking point. “They don’t want to speak to you,” he told the Assembly members, noting the Guild’s role in helping him speak to his council directly.

Crescent Trading

For Philip Pittack and Martin White, long-serving cloth merchants behind Crescent Trading, keeping their heads above water is becoming increasingly difficult. The main threat to their business has been the closure of Quaker Street. Previously a central route through Brick Lane, footfall has all but disappeared.

“Nobody wants to help us because we’re too small. We are working twice as hard as we did two years ago just to stand still,” Pittack said. “We’re not destitute, but we’re killing ourselves to earn a living.”

The closure of Quaker Street has dramatically hit footfall

Led by Nicholson, East London’s micro business owners are finding a shared voice to take on the challenges.

In March, the Guild published its Affordable Workspace Manifesto, putting a series of policies forward to increase the pressure on local decision makers.

The manifesto called on councils across East London to recognise the community value of micro businesses to a borough’s prosperity and reflect this in economic and planning policy decisions. It demanded that council’s set aside at least one empty asset in their borough for conversion into affordable workspace by the end of 2018. The manifesto also pushed for a “landlords register” to allow business owners to compare rents and support the development of an affordable rent formula.

When the manifesto was published in March, Nicholson said it was central in protecting the “vital diversity” of London’s economic eco-system. “The workspace crisis in London is as urgent and serious as the housing crisis,” she argued. “If adopted by the next leaders of local government in the local elections, our five proposals will help to provide viable and sustainable solutions.”

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manifesto

 

London councils urged to convert empty assets into affordable workspace

The Affordable Workspace Manifesto calls on councils across the capital to recognise the community value of small and micro business to a borough’s prosperity

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ABOUT THE EXPERT

Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.

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