AXA warns that this April’s business rate increases threaten the survival of the nation’s characterful and socially vital small shops. The company’s research suggests these local retailers are already under intense financial pressure, and offers a reminder of what our communities are set to lose.
The last decade has not been kind to Britain’s small shops: the nation has lost one in ten over this period. AXA’s research reveals that far from being able to shoulder extra taxes, local shops are the businesses most in need of help and support. By end of 2016, almost eight per cent say they expected their business to go under, compared to a three per cent average across all other small business sectors.
Hiring plans, an important economic indicator, are severely down on previous years too. Just nine per cent expect to take on staff this year, compared to 15 per cent at the start of 2015. While the majority – almost two thirds – expected business growth in 2016, that is now down to just 42 per cent for 2017.
Average annual income (before tax) for a small shop owner working full-time on their business is £15,657. When broken down by the average hours worked, this is barely above minimum wage (AXA estimates it a wage of £7.56 per hour).
What Britain is set to lose
AXA offers a reminder of what Britain’s communities are set to lose by further small shop closures:
Eight in ten small retailers say they invest in ensuring their shop reflects their local area’s history and character.
In rural locations, 72 per cent 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 say that local pensioners would struggle to find an alternative if they closed. Forty per cent provide senior citizen discounts.
Finally, on top of their business rates, a significant 28 per cent say they also invest their own profits into improving their local area through local action groups.
Darrell Sansom, managing director at AXA Business Insurance, comments, ‘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 per cent 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.’
Further reading on small shops
