SMEs call for support as retail rebound stalls

The Federation of Small Businesses (FSB), a peak body representing thousands of small and medium enterprises across the UK, is warning of the scale of the problems its members are facing.

Recent figures from the Office of National Statistics show retail growth falling, with a 2.8 per cent decrease in July followed by a lag of 0.9 per cent in August.

FSB national chair Mike Cherry said: “Small firms trying to recover from the pandemic are facing a barrage of hits to this which is now very visible as these latest retail figures show.”

Mr Cherry noted that this is hardly the only concern business owners are up against.

“Supply chain problems are hitting hard alongside spiralling employment costs and staff shortages, while the consumer-led recovery could be losing steam,” he said.

The fall in retail momentum came at the same time businesses were restrategising their operational model to accommodate the rise in national insurance contributions.

“News that the government’s regressive jobs tax will place 50,000 people out of work could not come at a worse time,” Mr Cherry said, noting that the high rate of spending usually seen towards the end of the year was anything but certain this December.

“Retail businesses are nervous about their peak Christmas season, with an opaque winter COVID plan likely to see trade restrictions installed at just a week’s notice. It feels to many like a sword of Damocles with a difficult winter ahead.”

Mr Cherry implored the government to consider reinstating certain structures of support for small and medium sized businesses on the verge of collapse.

“Measures such as uprating the employment allowance to support firms struggling with recruitment costs would help to free up cashflow to spur recovery of local communities, and promote hiring as furlough ends,” he said.

“Small firms are the backbone of our economy, if they continue to suffer, then the rest of the country suffers.”