Small businesses worried about drop in profits as lockdown restrictions lift

Small businesses worried about drop in profits as lockdown restrictions lift

One in five believe it will take over 6 months for revenue to bounce back to pre-pandemic levels

As lockdown restrictions begin to lift, thousands of high street businesses across Britain have opened their doors to customers after months of closure. Businesses reopening today will likely see a surge in revenue as they resume normal services and get back on their feet. However, several small businesses are worried that their profits could take months if not years to return to pre-pandemic levels, according to a survey. 

From April 12, outdoor dining, non-essential shops and hairdressers will reopen as part of the next step in Boris Johnson’s roadmap to lift lockdown restrictions. Lockdown measures were first eased on March 8 when schools were reopened followed by March 29 when the stay-at-home order ended and the rule of six returned.  Pubs and restaurants are allowed to open with outdoor service only, limited to serving customers in groups of six people or two households. All non-essential shops are open, including department stores, book shops, technology stores, clothing and homeware stores, auction houses and vehicle showrooms. Shoppers are also able to use fitting rooms again after more than a year of them being shut due to COVID-19 restrictions. 

Self-contained accommodation including Air BnBs, cottages and campsites are now open however, hotels and B&Bs remain closed. Gyms are now open however, gym-goers cannot attend with people outside their household and indoor socialising will be barred until May 17. Group exercise classes are also banned and saunas and steam rooms remain closed. Indoor swimming pools and other indoor exercise venues have reopened while hairdressers and nail salons have also reopened to the public. Outdoor hospitality venues like zoos and theme parks have also opened their doors. Weddings and civil partnerships are allowed to take place and the maximum number of permitted attendees has risen from six to 15, but all events must adhere to social distancing guidelines.  

Despite the government roll-out vaccine programme and lifting of restrictions, some small businesses are concerned about how long it would take to bounce back after almost a year of lockdown. According to a survey by Tide, the UK’s leading business financial platform, 37% of small businesses are unsure about when their revenue will return to pre-pandemic levels while 20% believe it could take over 6 months and 14% believe it will take over a year. 

An overwhelming number of business owners said they were concerned with the amount of time it would take to rebuild their customer bases. 72% of business owners believe it would take more than three months to gain back their customers and cited this as the main reason for the possible delays in profits. The second most common cause of concern was the need to adapt to COVID safety regulations which could potentially change the way they will now operate as a business.

Despite concerns, Prime Minister Boris Johnson’s roadmap for reopening businesses has kickstarted  with an overwhelming 90% of small businesses eligible for reopening. The long-term outlook of small business owners in these sectors is bright. 70% of businesses in the hospitality, retail and beauty and wellness sectors are confident their businesses will see some growth, compared to their pre-COVID position, by the end of 2021. When asked what kind of support would help them to make reopening successful, a third (32%) said that free or subsidised digital marketing would be the most essential. Rent relief and business rate relief were also popular options, with 25% and 20% citing this as the most helpful form of support respectively. The survey was conducted on 836 Tide members with businesses in the hospitality, retail and beauty and wellness industries between 7 and 8 April. 

It’s natural for businesses to be apprehensive about reopening after such a turbulent year, Oliver Prill, Tide CEO said. I really hope, and am confident we will, see a return of the outpouring of support for small, independent, businesses that was so prevalent this time last year. I would love to see a resurgence of the #ShopLocal campaign and I urge people to shop on their local high streets as much as they possibly can and demonstrate their support for small businesses as they begin to reopen this week. What we have learned over the course of this crisis is that small businesses are resilient and innovative, while it will take a lot of hard work, I am confident we will see our members come back stronger. 

The easing of lockdown restrictions has sent a positive outlook to the country as the government continues to implement the four steps set out in the road map. So far, the first two steps of the road map are now complete. Step 3, which will commence no earlier than May, will see indoor hospitality venues reopen including indoor entertainment and visitor attractions. This includes cinemas, theatres, concert halls, amusement arcades, bingo halls, casinos, bowling alleys, snooker and pool halls. Indoor and outdoor attractions will also open their doors to the public, including museums and galleries, playgrounds, skating rinks, games and recreation venues, water parks and film studios, zoos and animal attractions as well as landmarks, greenhouses and other heritage sites. Exhibition halls will also be open for conferences, trade shots and private dining subject to capacity limits. Hotels and B&Bs can reopen for leisure purposes. Saunas, steam rooms and indoor sport and group exercise classes will return. 

In Step 4, which is essentially the last phase, nightclubs and adult entertainment venues will be allowed to reopen again, with a lift to all restrictions including social contact and large events. This will take place no earlier than 21 June if all goes to plan, but is subject to the outcome of the Events Research Programme and a review of social distancing measures.

Latifa Yedroudj
Latifa Yedroudj

Share via
Copy link