Warning on revaluation
Small shops most vulnerable from rates rise
Insurance company AXA today warns that the forthcoming business rate increase threatens the survival of the nation’s small shops.
The company’s research suggests these local retailers are already under intense financial pressure.
The last decade has not been kind to Britain’s small shops, it says, with one in ten lost from the high street.
AXA’s research reveals that local shops are the businesses most in need of help and support. By the end of 2016, almost 8% said they expected their business to go under, compared to a 3% average across all other small business sectors.
Hiring plans, an important economic indicator, are also severely down on previous years. Just 9% expect to take on staff this year, compared to 15% at the start of 2015.
While the majority – almost two thirds – expected business growth in 2016, that is now down to just 42% for 2017.
Average annual income (before tax) for a small shop owner working fulltime on their business is £15,657. When broken down by the average hours worked, this is barely above minimum wage.
In rural locations, 72% of local shops provide retail space for local craftsmen, artists and farmers. Consequently, the pace of closure of village stores – 300 a year – represents a pending crisis in Britain’s countryside.
A third of independent shop owners said that local pensioners would struggle to find an alternative if they closed. Forty per cent provide senior citizen discounts.
More than a quarter (28%) say they invest their own profits into improving their local area through local action groups.
Darrell Sansom, managing director at AXA Business Insurance, said: “Each time a local shop, hairdresser or pub shuts down, local people lose another bit of their heritage and community life.
“Our small shop surveys reveal that many are hanging on and simply do not have the spare income to the 180% tax increase expected in some areas of the country.
“The years of crisis and austerity have been deeply unkind to local shop communities, and while they struggle on with such goodwill, it is a shame to witness further burdens placed on their shoulders.”