We love our independents in Leeds, but it’s a hard time to be a small business.
The independents are one of the city’s biggest selling points, but we can’t take them for granted because they’re under serious pressure and it’s starting to take its toll. Business closures in Leeds jumped by a whopping 43% from 2016 to 2017, and with Brexit looming, no one knows what’s around the corner. But what exactly are the independents up against and why aren’t they getting more support? We caught up with local business owners to find out.
The changing face of the high street
Over the past 20 years, the internet has changed the way we shop and the high street has paid the price. According to the Office for National Statistics, one in every five pounds spent with UK retailers is now online – and less people shopping on the high street means less people shopping with independents. As a result, they’re being forced to close – in the first six months of 2018 alone, 35 shops shut in Leeds city centre, but only 9 opened.
Clare Riley is co-founder of one of the businesses trying to swim against the tide. Her shop, Our Handmade Collective, is a mini department store that stocks unique products made by independent designers, so she understands the problems indies are facing better than anyone, “As a bricks and mortar retailer, the growing trend for online retail, 24/7 shopping and more companies offering huge discounts in sales means that small, independent retailers, who make products by hand, have no way of competing. They are huge challenges for us to face.”
In that environment, how can small businesses compete? It’s not an even playing field. Not only are online companies tempting people away from the high street, but they can beat the independents on price too. These big businesses can set up shop outside the city centre, so they don’t have to pay the same business rates, rents or taxes. The result? They can sell their goods for a price the independent can’t match, effectively pricing them out of the market and making it harder for us, the shoppers, to do the one thing we need to do – support local businesses.
This is a David vs Goliath battle to survive
It’s not just the rise of online shopping that’s making it harder for independents to survive. Having a high street presence in a city centre costs money – for a big business it’s barely a drop in the ocean, but for an indie it can be crippling. According to a recent report from the Housing, Communities and Local Government Committee, out of date business rates and unfair tax regimes are making it harder for independents – bricks-and-mortar shops fork out between 1.5% and 6.5% of their turnover on business rates, but retail giants like Amazon spend just 0.7% of theirs.
It’s a problem that independents are acutely aware of. “Most of the advantages have gone towards large businesses who have been able to lobby successive governments to their advantage. Unless you close the loopholes around tax and unless you get a progressive government and councils, things will only get worse for independents, no matter how fantastic they are,” Matt Bradshaw, Assistant Manager of Jumbo Records, explained. They’ve been in business since 1971, but like their fellow independents, they’re finding it harder and harder to compete.
So why aren’t they getting more help? Although small businesses can get upto a 100% reduction in rates, the cuts only apply if they pay less than £15,000 a year. But in the city centre, even a small shop or restaurant can exceed that amount. And Leeds City Council can’t do a damned thing because they’re in the midst of austerity measures that will see 59% of their funding cut by 2020. Rock, meet hard place. If we’re going to give independent businesses the ability to thrive, small business relief needs a top-to-bottom rethink.
The endless Brexit quagmire
Brexit isn’t just the bane of our lives, it’s also affecting the independents, and you can bet that no one thought about it during the referendum. “The biggest risk to our business right now is Brexit. We all have the feeling that at any moment the rug could be pulled out from under us, because no one knows how it will affect our jobs and our livelihoods. Real or not, this concern is yet to be addressed. When we have an outcome we can get on with things,” Becky Palfery, owner of independent bookshop and art gallery Colours May Vary, told us.
We may not know exactly what’s coming, but we can make an educated guess. The University of St. Andrews’ recent study on the impact of Brexit revealed that leaving the European Union is likely to slow growth, reduce capital investment, hinder product development and make it harder to access external finance – all things that independents need to thrive.
Many rely on suppliers and manufacturers in the EU, and right now, they don’t know if they’ll be able to maintain those relationships after we leave. Others, like the North Bar Group, have benefited from EU grants that simply won’t be there this time next year. As such, Brexit is a huge step into the unknown for the city’s independents – their fate has been left in the hands of politicians and they won’t be able to plan for the future until a final decision is made.
It ain’t over yet
Despite all the challenges they’re facing, the independents aren’t giving up. And thank god for that, because these are the places that make Leeds unique. John Gyngell, owner of North Bar, opened his first bar on New Briggate back in 1997. He’s seen first hand how the high street has changed. “I still believe that the independent scene in Leeds has a real tenacity. There are some good people doing some very good things. There are still exciting new openings happening, and there are some excellent success stories to celebrate. When choosing to spend your money in an independent venue you are supporting a business that adds to the fabric of its community, they become real social hubs.”
With everything that’s stacking up against them, now’s the time to back our independents. They’re the lifeblood of the high street, without them, Leeds wouldn’t be the city we know and love. So whether it’s a couple of quid or a big night out, give the indies your time, your respect and your hard earned cash. After all, you’ll miss them when they’re gone.