Big retailers have been handed an unfair advantage this Christmas – it’s time to #ShopEthicalInstead

Big retailers have been handed an unfair advantage this Christmas – it’s time to #ShopEthicalInstead

2020 has been a difficult year for the retail sector, as Covid-19 has swept around the world.

Now, in the crucial Q4 holiday sales period, UK independents deemed “unessential” have been forced to close for a second national lockdown, giving an unfair competitive advantage to large chain corporations, and threatening the future of our high streets.

Essential retailers have been permitted to stay open during the second lockdown, which is set to last for four weeks from 5th November – 2nd December 2020.

However, alongside the groceries and essential supplies, shelves in many supermarkets, garden centres and homeware stores are stacked high with Christmas gifts, while small, independent retailers have been forced to close their doors.

Q4 is a crucial time for independent businesses – with many relying on the holiday shopping period to make as much as 80% of their annual revenue.

They also use this time to make enough money to cover the naturally quieter periods of January and February, and to make sure they have enough funds to pay for future stock, utilities and rent.

Although the government has (in some cases) provided grant funding to affected businesses, this is largely just enough to cover rent for the closure period and does not account for the revenue they’re currently missing out on.

This will have a knock on effect in the new year, as small business cash flow will impact jobs and other businesses in their supply chains.

Throughout this incredibly uncertain and challenging time for us all – the message from the government has been “We’re In This Together” and “Protecting Lives and Protecting Livelihoods” but many independent retailers feel that they have fallen through the cracks, as the lockdown closure rules have handed big corporations an unfair competitive advantage during the most crucial sales period of the year.

Some of these small retailers have had to pivot quickly to set themselves up to handle online sales. Although many already had some form of online presence, they don’t benefit from the same levels of brand awareness which contribute to successful online sales at significant scale, which is why the passing footfall to these shops is essential, especially at this time of year.

Consumers will naturally go for the convenient option of buying Christmas gifts in person during their essential trips to the shop, rather than searching for independents online or waiting until they reopen on 2nd December. However, this is creating an unfair competitive environment where the big retailers are thriving while independents struggle to survive.

Hellen Stirling-Baker is the Founder of Small Stuff UK, an independent toy shop in Crookes, Sheffield, who has been campaigning for more clarity around the unfair lockdown rules:

“In the run-up to Christmas a shop like mine would normally be incredibly busy; the hustle and bustle of the high street, late night openings for pubs and shops and the local Christmas markets encourage both locals and people from further a-field to shop with us for their toys, gifts, cards and children’s clothes. 

Of course we support the need for a lockdown. In these unusual circumstances, it’s important to keep everyone safe. But what I don’t understand is why the devastating impact this is having on small businesses is being ignored. We’ve spent a considerable amount of time and money adapting the shop so customers can safely social distance – the measures we’ve got in place are more controlled than the big supermarkets! But we’re deemed ‘non essential’ so we have to close.

We can’t compete with the big retailers while they’re allowed to stay open but we’re restricted to online sales only. Our sales have already dropped by -40% compared to last year due to lack of footfall and forced closures.”

As of January 2020, there are 5.6 million micro-businesses in the UK, making up 96% of all businesses in this country. 9% of businesses in the UK are retail, but they account for 34% of all turnover – the highest of any sector. Micro-businesses and SMEs contribute a huge amount to the economy, as well as the well-being of our local communities. Local shops and cafes bring vibrancy to areas and housing prices boom. 

But with the latest lockdown rules the government has handed an unfair competitive advantage to large retailers at a time where our independent businesses and high streets are already struggling to survive.

Today #EthicalHour, a support network for hundreds of independent, ethical and sustainable small businesses, has co-signed a letter written by Hellen of Small Stuff UK, to the Prime Minister Boris Johnson, Chancellor of the Exchequer Rishi Sunak and Alok Sharma, Secretary of State for Business, Energy and Industrial Strategy, calling on them to address this issue urgently.

In order to protect the small businesses at the heart of our economy and local communities, we have the following recommendations:

  1. Provide clarity about why essential retailers have been allowed to continue to sell ‘non essential’ items alongside essentials during this lockdown. Especially considering that in Wales, during their ‘firebreak’ lockdown, essential retailers were told to stop selling these items to keep competition fair.

  2. When planning any further pandemic response as we look into the new year, ensure that consideration is given not just to the immediate overheads of small businesses, but the ongoing cash flow and revenue too. This is essential for our survival, especially if we are to preserve jobs in the long-term and reduce dependency on Universal Credit.

  3. Meet with the organisers of #ExcludedUK, who represent self-employed and small business owners across the country, to understand the gaps in support provided and make provisions to support those who have been left behind.

 

Andrew Goodacre, CEO of BIRA (British Independent Retail Association) also lent his support to the letter and recommendations:

“In August, BIRA commissioned the Local Data Company (LDC) to assess the damage caused by the first lockdown. Out of a sample of 90,000 shops throughout the UK, 24% (21,000) did not re-open after the first lockdown. 

Bira believes (and I agree) that because of the time of year, this 4 week lockdown will do more damage to the sector and many perfectly good businesses will be permanently closed in January and February, having run out of cash. There is a perfect storm developing for small retailers – less cash for the all important festive period, lifting of the rent moratorium, stock to be paid for and all the other usual quarterly bills such as VAT. 

Unless we get more support now, we could lose up to 50% of independent retail in the 12 month period from March 2020 to March 2021, with the Midlands and the North likely to be most affected as they have suffered from Tier 3 restrictions prior to the lockdown. 

The national retail sales figures may lead people to believe that retail is bouncing back. Please look below the headlines and you will see it is food, DIY and on-line driving the sales – essential items. Non essential retailers on the high street have suffered all year and cannot withstand much more.”

Independent businesses need the government to provide a clear, forward thinking approach to how to deal with this incredibly unusual run-up to Christmas. Ignoring their voices could cause incredibly detrimental economical problems in the first quarter of next year.

 

Now in its fourth year, the #ShopEthicalInstead campaign by Ethical Hour is elevating the voices of independent businesses and using the noise of Black Friday to showcase ethical and sustainable alternatives from small businesses that need support.

In the first two weeks of November 2020, the hashtag has already reached over 443,000 people on social media. Small businesses are encouraged to share their stories and showcase their products using the hashtag, and by taking part in the annual #ShopEthicalInstead challenge – a series of daily social media post prompts in the run up to Black Friday.

This year, more than ever, small businesses need our support. Shopping from a small business helps to support local communities, and by choosing ethical and sustainable products you can have a positive impact for people and the planet too. Find out more and follow the #ShopEthicalInstead Campaign here.

On Tuesday 17 November, #EthicalHour will be hosting a free live training session for independent business owners, all about how to sell more products online. We’ll be interviewing two small business owners about their online experience. They’ll be sharing the strategies that work for them, and you’ll come away with inspiring new ideas and practical tips to implement to improve your cash flow quickly. Reserve your space here.

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