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One in five small UK businesses face closure if Christmas sales disappoint, survey suggests

Ben Chapman
PA

More than one in five smaller UK businesses fear that they will go out of business within 12 months if Christmas trading is below average this year, a survey suggests.

About one in 12 said they would go under in a matter of weeks and 22 per cent said they will not make it through 2020 if festive sales are poor.

A quarter of small British businesses said Christmas sales are “very important or vital” to their survival.

The survey for Notonthehighstreet found that although 85 per cent of shoppers in the UK say they support smaller firms, a third have not purchased anything from one in the past six months.

Just a quarter of Christmas spending is expected to go to small firms this year, with larger corporations and chains taking the rest.

Claire Davenport, chief executive of Notonthehighstreet, said the figures suggest that shoppers may not be “putting their money where their mouth is” when it comes to supporting local firms.

She said: “It’s clear that many smaller businesses are heavily reliant on the Christmas trading period, and a below-average Christmas could put them in a precarious situation when it comes to the long-term viability of their company."

Christmas sales are always important for small and large retailers alike, but this year is seen as particularly critical after a year of insolvencies and store closures.

In the six months to September, 44 retail businesses went into administration, including Sir Philip Green’s Arcadia, data from KPMG shows.

Major retailers shut almost 6,000 shops in the first nine months of the year, up 77 per cent on the total for the whole of 2018, according to separate figures compiled by the Centre for Retail Research.

Large bills for business rates remain a key issue for many retailers, with each of the major parties pledging to review the system if they win power in next week’s election.

However, few details have emerged in the manifestos, with the Conservatives vowing to “further reduce business rates for retail businesses”, while Labour says it will “review the option of a land-value tax on commercial landlords as an alternative and develop a retail-sector industrial strategy.”

Labour also plans to “revive high streets by stopping bank branch closures, banning ATM charges and giving local government new powers to put empty shops to good use”.