Economy shows green shoots despite recession

  • 26 Aug 2020

Responding to the latest retail figures from the ONS which showed that retails sales were rising across Great Britain, Federation of Small Businesses (FSB) National Chair Mike Cherry said: "In what is no doubt one of the toughest periods of trade for small businesses in recent history, it's promising to see that people are indeed confident enough to go out and shop once again.

"One clear sign that people are physically shopping once again is the first drop in online sales (down 7% on June '20) since November 2019, which after a record period of online sales throughout lockdown was inevitable. But many small firms, especially in recent months have either expanded or developed their online presence, so it’s vital that both physical as well as online sales remain buoyant."

 

 

The data reveals:

  • July retail sales volumes increased by 3.6% when compared with June, and are 3% above pre-pandemic levels in February 2020
  • Online sales dipped by 7% as people returned to high streets
  • Despite growth, fashion sector remained 25.7% lower than February

Mike Cherry added: "Many small firms have been only open for a matter of weeks, but the support that was on hand such as a the job retention scheme, incentives like Eat Out to Help Out and access to funds via local authority grants are all going to be closing or wound down over the next few weeks or months, which means that the struggles for small businesses show no end in sight.

"We are in the midst of the deepest recession on record, and we need the Government to take a proactive approach to how it will support business right across the country. After months of measures to ensure job and business survival, the next stage is about how we can grow once again to aid business and job creation.

"We are calling on the Government to issue the most pro-business, pro-self-employed Budget ever seen that encourages innovation, brings goods and services to market while avoiding taxes that could further stifle already struggling businesses.

"The green shoots of the economy are visible, but we cannot see these and become complacent, for some firms it will take many months and potentially years to fully recover from this crisis."

With the Eat Out to Help Out scheme in its final full week, FSB is calling on the Government to continue and extend the initiative to further help thousands of small food and drink businesses right across the country.

Mike Cherry said: “The Eat Out to Help Out scheme has been an overwhelming success in getting people back on their high streets and in their town centres. We now need to see it extended to continue the critical support that it is providing for small firms as we enter a period of economic make or break.  

 

“Over the past few weeks, the scheme has been hugely welcomed by small businesses and their customers alike. A nationwide one-month extension would go some way to helping many firms which are still only just about managing in this time of crisis.

“Beyond September, the scheme should be reactivated in areas that have gone through local restrictions or lockdowns. It’s vital that we continue to offer as much support as possible in areas where restrictions have been reintroduced – this would be a great way of doing just that.

In Scotland FSB has written to the Secretary of State for Scotland, Rt Hon Alister Jack MP, urging the UK Government to re-introduce the Eat Out to Help Out scheme in Aberdeen once restrictions are lifted in the city. Representatives from all of Scotland’s main political parties have also backed the move to extend the scheme.

The small business campaign group highlights that because of the local lockdown, independent cafes and restaurants in the city, as well as local residents, have been unable to benefit from the scheme. In addition, a petition calling for the scheme to be extended has gathered more than 1100 signatures.

David Groundwater, FSB’s development manager for the North East of Scotland, said: “Like businesses across the length of the country, independent restaurants and cafés in Aberdeen have had an awful year. But unlike their counterparts, these operators haven’t been able to welcome customers back through their doors this August because of local lockdown restrictions. 

“To help Aberdeen eateries get back on the feet, we want the UK Government to reintroduce the Eat Out to Help Out scheme when it is safe to do so. This move wouldn’t increase the overall costs of the initiative, as Aberdeen isn’t benefitting from it at present.”

 

Ramona Obafemi, owner of the Highlander Café Bus in Aberdeen, said: “I’d love to be welcoming customers into my café at the moment, offering them fantastic discounted food and drink with a great view of Aberdeen beach. But I can’t because of the local lockdown.

“It doesn’t seem fair that firms like mine won’t benefit from the Eat Out to Help Out scheme. It would give Aberdeen’s independent eateries a huge boost if we could benefit from the initiative when it is safe to do so.”

Related topics