Many small businesses expect to make a loss or close over next financial year

Are London independents at a disadvantage as lockdown restrictions lift? Almost three fifths (60%) of London businesses expect to make a loss or close over the next financial year.

As a city reliant on business and tourism; endless lockdowns, working from home and travel bans have often left the capital city looking like a ghost town. Pair this with businesses operating at limited capacity in April, and it’s clear that the upcoming rule changes might not be enough to save struggling establishments.

More than half (53%) of London business owners state that COVID-19 restrictions as the biggest concern for their business this year. That’s according to the 2021 Business Challenges report carried out by card payments specialist takepayments Limited. The report surveyed 1,000 small business owners and decision makers across the UK to uncover their biggest concerns for the year ahead.

The financial impact of three national lockdowns is hard to ignore as almost three fifths (60%) of London small business owners expect their business to make a loss or close over the next financial year. Two thirds (63%) of London SMEs state they have seen a decrease in consumer spending over the past year, so it’s no surprise that further restrictions are a big concern.

Decline of the high street, closed offices and lack of tourism 

London’s economy is heavily reliant on tourism and packed office buildings to encourage consumer spending. In 2019, tourists spent £28.4 billion in the UK and London accounted for a massive 55% of this inbound visitor spend [1].

Whilst footfall is currently low across the capital’s high street due to employers working from home, the impact of big brands folding is expected to devastate the high streets footfall further resulting in two fifths of London independents expressing concern about the decline of the high street as less footfall will ultimately lead to a loss of sales.

Sandra Rowley at takepayments limited said, “Whilst its back to business for many businesses across the UK, for London it may be more of a struggle,  as working from home has left a changing landscape in the capital.

“As high street giants continue to fold under the pressure of lockdown, it’s not just the bigger companies worried about the financial pressures of lockdown. As the number of shops decline, it can only be expected that footfall will also follow leading to a decline in sales.

“It’s important that business owners diversify their business offering and make the move online where they can try to continue their business as usual beyond lockdown lifting.”