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Small shops struggle as sales bring chain stores huge profits
Aline Nassif and Rashid Razaq29 Dec 2008
INDEPENDENT retailers today told how they fear for the year ahead as they struggle to match the big discounts of major high street chains.
Small shopkeepers said they were braced for a bleak future and had been forced to close parts of their business after big falls in sales.
Their warnings came as larger competitors revealed record profits after putting on major Christmas sales in a bid to lure customers.
John Lewis sold £21.3million worth of goods on Saturday - a seven per cent increase on the same day last year with women's clothing and home furnishings among the best sellers.
Managing director Andy Street said: "This is a remarkable result at any time and particularly so in this challenging economic climate."
Waitrose posted its busiest ever shopping day on 23 December with sales of £34.4million. Total sales in the week up to Christmas rose by six per cent on last year, with turnover on the 27th up 36.9 per cent.
More than five million shoppers took to the streets on Boxing Day, an increase of 12.5 per cent on last year, according to market research group Experian.
But experts warned that smaller retailers faced tougher times ahead as the capital sinks into recession.
Laurence Payne, chairman of the London branch of the Federation of Small Businesses, said it was "crucial" for small shops to differentiate themselves to have any chance of survival.
Mr Payne said: "Our members are telling us that even if they are doing alright, there are empty shops appearing all around them."
One independent retailer, Natalie Farouz, who owns vintage shop Shock and Soul in Camden Passage, has been forced to close half her business. She said: "My takings are down by 25 per cent compared with last Christmas.
"It would help if they brought the rents down. If something doesn't give then I might lose everything."
Europe's largest second hand record shop, Beanos, in Croydon, is now closing after 32 years of trading.
David Lashmar, its managing director, says the business had been in trouble since internet music downloads took over but the economic downturn had been the tipping point.
Rosa Lamache, 34, manager of two family-run designer Diverse boutiques, in Upper Street, Islington, was forced into 30 per cent-off sale a week before Christmas for the first time in two decades. She said: "Our main competitors are Selfridges and Harvey Nichols. The real crisis is going to hit us next year. The doubling of the rent before the credit crunch was a huge blow."
Reader views (5)
In my opinion, it´s a great crime, giving all the financial aid just to the big players like Banks, Companies and large Enterprises etc.
Billions of billions of Pound, Dollar and Euros are thrown out of the windows - in my intention.
There should also be a helpful financial hand for such individualists, which run funny, alternative, very creative little shops.
If the rent was doubbled - cut it down on the level before the crisis! That could be a good idee to help these important shops to survive ...
Otherwise a great potential of creativity gets lost !!!
- Johnny B. Good, Blackfield, Ohio, 30/12/2008 20:17
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Fezziwig was right. Let's go back, pay a bit more and support this. It's in our best interest
- Dann, Victoria BC, 30/12/2008 18:07
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Huge sales do not necessarily bring the "huge profits". Some of those large stores making big sales by offering 50%+ reductions may go out of business in the New Year...so much for the 'profit' idea. But what is real is that all business is suffering, and small business more than most. And the reason is very straightforward - all those rules and regulations, from government at every level, have a disproportionate effect on small businesses - they might be just a profit-denting aspect in good times...but in bad times they are the tipping point. But of course government doesn't want to lose revenue when it is promising to spend vast sums of our money does it? So welcome to the world where real business will be wiped out and the taxes needed for artificial government-induced ventures will be the reason. The Congestion Charge, for example, is a major barrier to business for the smaller niche retailer - and although the 'kind of' promise to eventually maybe scrap the Western Extension should receive two cheers, it would be more helpful if immediate relief were given by amending the times to allow people to shop while the dark nights of the period after New Year make a sizeable number of them want to use their cars. Fat chance I'm afraid. They all want your money - whether it's "Boris" or "Gordon"..they are really all the same.
- Damian Hockney, London, UK, 29/12/2008 22:24
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It was interesting to note that when the Icelandic problem started even town halls were in trouble with their rates!
Certainly central government needs to sort this out fast.
- Tony Islander, Herts, 29/12/2008 15:46
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The government must reduce business rates for small businesses. The commercial landlords must also reduce rents. Otherwise the small shops will disappear and we will end up with no choice but the High Street chains. The government has done nothing that truely helps small businesses.
- Dannyp, Egham, 29/12/2008 10:46
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