The government is expected to advise people in the UK with even mild symptoms to self-isolate in a bid to curb the spread of the virus, which has infected 373 people in the UK and resulted in six deaths.
China has been under lockdown since Chinese New Year in January and Italy announced similar measures this week.
Martin Foster, managing director of independent leather goods retailer Lakeland Leathers, told Drapers some of its stores in tourist locations had reported a fall in trade from Chinese visitors.
“[Coronavirus could] create a ghost town, and we’d need the government to help with the inevitable cashflow issues that will arise from a short-term disruption to sales,” he said. “The government should publish contingency plans to support businesses. A simple and immediate measure would be to allow businesses to delay by one or two months any VAT or corporation tax owing.”
Ahead of this week’s Budget, the British Independent Retailers Association (Bira) called on the Treasury to set up an emergency fund to help affected businesses. It said there should be an immediate increase in the business rates discount to 75%, and the relief should be extended until the emergency has passed. It called for tax holidays to support cashflow, and support for retailers whose staff are required to self-isolate.
“The important thing is for the government not to scare people. There are many companies that have cashflow issues, and if you have a fall of 10%-15% of sales, like in the 2008 [recession], this could finish some businesses,” said the managing director of one independent menswear retailer. “We are stress-testing our cashflow taking a 5%-15% fall in sales. It’s crucial the government keeps people calm, otherwise this could be a replay of 2008 with a mini-recession.”
“It’s definitely a worry, as it affects consumer confidence,” said Mark Dransfield, owner of Sandersons Boutique Store in Stocksbridge, Sheffield. “In the short term, it could hurt sales and, longer term, it could affect our staffing levels if we have an extended period when sales are affected.”
A Revenue and Customs spokesperson said: “Where any business is in temporary financial difficulty that means they cannot pay their tax in full, they should approach Revenue and Customs to agree a time-to-pay arrangement. This enables the business to pay everything that it owes through a payment plan and return to a stable financial footing [to resume] paying its tax on time.”
Andrew Goodacre, Bira’s chief executive, told Drapers: “If people are being told to self-isolate to prevent the spread of coronavirus, then footfall to independent retailers will be severely affected.
“We urge the government to put together an emergency business fund to support small retail businesses, which will undoubtedly suffer because of this crisis, otherwise it could be potentially catastrophic for our high streets and town centres.”