Home Business NewsBusinessOlympic bust: Why the Games meant game over for some businesses

Olympic bust: Why the Games meant game over for some businesses

by LLB Editor
12th Aug 13 9:52 am

The London businesses the Olympics forgot

Follow me: @shrutitripathi6ย andย @LondonLovesBiz

Packed stands, spectacular fireworks displays, performances by superstars and deafening roars of applause. This day last year, London was in full party mode at the closing ceremony of the London 2012 Olympic Games.

But not too far off from the Olympic stadium, some Londoners were in no mood to party. The Games had meant game over for their businesses.

These businesses didnโ€™t see any of the 14,000 athletes, 21,000 media, and around 800,000 spectators, that the Olympics brought to London visit their shops. The result? Some firms closed, some saw a 30-70% drop in turnover while others racked up huge debts. To top that, parking restrictions by local councils and โ€œBerlin Wall-likeโ€ barricades in some areas, shooed off their regular customers.

Earlier this month, we saw government officials shouting from the rooftops about the ยฃ9.9bn boost the Olympics brought the UK economy – including a ยฃ4bn windfall for the London economy. The figures were met with criticism, with some analysts saying that the investment would have taken place anyway and other saying small businesses lost out.

Mike Cherry, national policy chairman of the Federation of Small Businesses, has doubts over what โ€œthe true economic legacy is for micro and small businessesโ€.

โ€œOut in the regions we found that the effect of the Olympic and Paralympics for small businesses didnโ€™t materialise as much as had been hoped. Some businesses certainly did benefit from the Games with really good contracts, but for others it just didnโ€™t happen,โ€ he says.

We donโ€™t mean to be killjoys. In fact, regular readers of LondonlovesBusiness.com would vouch for the fact that weโ€™ve time and again celebrated the success of the Olympics and what a great advertising campaign it has been for London. However, we feel itโ€™s important to highlight the plight of businesses that didnโ€™t exactly strike gold at London 2012.

Paul Cunningham, owner, Biscuit Ceramic cafรฉ โ€“ โ€œThe Games were like an apocalypse for usโ€

Location: Greenwich Market

Olympic effect: 70% drop in turnover

Biscuit Ceramic Cafe

โ€œThe Olympics nearly killed my business, my turnover dropped by 70%. The Berlin Wall-like barricades put in Greenwich Market to guide visitors to Greenwich Park, where the Olympic and Paralympic equestrian events were held, meant that neither the tourists nor our regular customers could reach the shops.

โ€œWe were so excited about the Olympics and had planned staff hours and new products in advance but it was heart-breaking to sit in the shop the whole day with no customers dropping in.

โ€œAlso, I donโ€™t recognise the ยฃ9.9bn Olympic boost that the government has been celebrating. I have doubts over the integrity of the calculation; it doesnโ€™t chime with anything that is appropriate for my business. It was like an apocalypse for us.โ€

Dragana Perisic, owner, designer boutique Dragana Perisic Shop: ย โ€œI had to wind up my business, thanks to the Olympicsโ€

Location: Cheshire Street, near Brick Lane

Olympic effect: Business shutdown

Dragana Perisic Shop

โ€œThe Olympics was the worst period since I set up the shop seven years ago, it was an absolute disaster.

โ€œPeople just didnโ€™t come in and I think the media publishing stories about how busy London was going to be during the Olympics scared people from coming to the capital.

โ€œNo doubt August isnโ€™t the busiest month for businesses, but this was the worst ever. Just paying my shop rent became a big struggle.

โ€œI lost a lot of money in July and August last year and it affected my cashflow so much that I had to shut down. How could I have gone on when my business was down more than 60%?

โ€œIโ€™ve now started from scratch and opened a shop on Redchurch Street near Shoreditch.โ€

Sudhir Patel, owner, Tanna Cards: โ€œThe Games made us more losses than profitsโ€

Location: Upton Park

Olympic effect: 30% drop in turnover

Queen's Market, Upton Park

โ€œMy shop is in the Upton Park area which is nowhere near the Olympic Park. Even then, I suffered a 30% drop in turnover that I havenโ€™t been able to cover up for.

โ€œI still have more than ยฃ1,000 worth of Olympic souvenirs lying in my warehouse – thatโ€™s a very big amount for a shop owner like me. Nobody came to the shops and it was very upsetting.

โ€œAlso, the council put parking restrictions in the area which discouraged our existing customers from coming in to the shops. This led to a change in customer habits which is affecting footfall even today.

โ€œThe Olympics were meant to be about boosting London businesses but frankly, it made us more losses than profits.โ€

Kate Hill-Smith, owner, Red Door Cafรฉ: โ€œThe Games were a complete joke for businessesโ€

Location: Greenwich

Olympic effect: 30% loss and debts

Red Door Cafรฉ

โ€œWe were doing really well in the beginning of the summer and the run up to the Games but it all turned out to be a big joke for us by the end of it. The barricades prevented visitors from visiting the markets so not only did we not get any extra trade, our existing customers couldnโ€™t get to us either.

โ€œAlso, a month before the Games, Greenwich council threatened court action if we didnโ€™t take our tables and chairs inside during the Games. This meant we couldnโ€™t put any aid boards or signs outside our shops to advertise our businesses for a whole year.

โ€œWhat was even more disappointing was that we later found that Greenwich Island is private property and is owned by Greenwich Hospital Estate. Itโ€™s not owned by the council. So the enforcement was just about the biggest trick and con for the benefit of the Olympics.

โ€œMy loss of earnings over the last year has gone into thousands of pounds, and thatโ€™s not an exaggeration. I lost at least 30% for the two months and havenโ€™t been able to recover since.

โ€œWe were all expecting a bonanza and were left with a big hole in our pockets.โ€

David Manchester, owner, Manchesterโ€™s, The Flower Shop Greenwich: โ€œGames were a no-go for businessesโ€

Location: Greenwich

Olympic effect: None

Manchesterโ€™s, The Flower Shop Greenwich

โ€œThe government wanted us to believe that the Games would be good for business. Well, they werenโ€™t. We saw thousands of people coming to our area to see the Olympics but they didnโ€™t bother coming to our shops.

โ€œTo be honest, I wasnโ€™t surprised. Iโ€™ve been in business for 42 years and I wasnโ€™t expecting much. In fact, I was expecting all the hassle we got. We couldnโ€™t get into the Oly
mpic lanes – the roads that were reserved for accredited Games vehicles – and most of our customers went on holiday.

โ€œBecause we were mentally prepared that the period would be quiet, we didnโ€™t bother getting extra stock.

โ€œHaving said that, I think the Games were a no-go for any business that was looking to make money. No Olympic benefits were felt this side of town.โ€

Isaac Lilos, co-owner, Arty Globe by Hartwig Braun: โ€œWe have every reason to believe that if it werenโ€™t for the Olympics we could have enjoyed a normal strong summerโ€

Location: Greenwich

Olympic effect: 20-25% drop in turnover

Arty Globe

โ€œEvery business in our area was encouraged to stock up before the Games, as we were constantly told by the organisers what a fantastic opportunity it would be for businesses.

โ€œIn the months before the Olympics, business was very flat due to a lack of regular overseas visitors to London and also Greenwich Park being mostly closed in preparation for the equestrian games.

โ€œDuring the Olympics, we were busier but not enough to compensate for the lack of footfall before and after the event, so the whole year was down by around 20-25% compared to normal years. We have every reason to believe that if it werenโ€™t for the Olympics we could have enjoyed a normal strong summer in terms of footfall and sales.

โ€œBusiness certainly, and thankfully, has recovered since then and this summer it has gone back to normal. In terms of the Olympics legacy – it does not feel tremendously different to any other year of trading at Greenwich so we cannot immediately see how the Olympics made any lasting difference to trade & business one year on.โ€

Fiona Bell Currie, owner, MyGorgeousCards.com: โ€œOlympics werenโ€™t thrilling for small shops or sole tradersโ€

Location: Blackheath

Olympic effect: Stopped new ranges

Fiona Bell-Currie, founder, my-gorgeous-cards.com

โ€œI am a sole trader specialising in designing products celebrating London inย my local area of Blackheath and Greenwich. Everything I sell retails at under ยฃ10.

โ€œBelieving the promises about the Olympics being fantastic for small businesses, I reprinted my best ranges, brought out two new ranges of postcards andย had more of my popular coasters made. The shops were very interested and most took up my offers. Imagine my horror when I never heard from them again, not until they folded.

โ€œIt appeared that in Greenwich and Blackheath shops were not allowed to open before 12 noon. Barriers were excessive and severely limited access to shops and the Greenwich Market.

โ€œThough I stocked two shops close by the Greenwich railway station, they both folded, without a word. In Blackheath I lost two more outlets. The impact of the Games, on top of a recession, on top of shops having excessively high rates, spelt the end of my own developing ideas for the area.

โ€œThe Olympics were thrilling and incredible in so many ways, but not for the small shops, nor the sole traders.โ€

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