Drapers’ survey shows independent businesses are currently battling to survive amid high street headwinds, with more than a quarter reporting they are not profitable. It found that the survival of the independent sector will require significant action from local councils and wider government.
Independent retailers play a vital role: nurturing new brands, setting the standard for service and serving their communities. But as high streets up and down the country are left with voids from the torrent of retail collapses, a punitive business rates regime, and political and economic uncertainty brought about by Brexit, the odds seem stacked against the UK’s smaller fashion businesses.
Against this backdrop of instability, Drapers conducted a survey of the independent sector to uncover the challenges businesses are facing and to find out what local and national support they need. The survey was open to fashion-based independents and received 133 responses from across the UK and Ireland.
Worryingly, more than a quarter of respondents revealed that their businesses are not currently profitable, while only 35% have felt confident enough to expand by opening another store in the past three years. When asked to rank the main concerns in running an independent business, Brexit was top of respondents’ lists. This was closely followed by business rates and high rents.
In December last year, the government launched the Future High Streets Fund to help revive town centres with a combined £1bn investment. A total of 100 towns have now been shortlisted and have received up to £150,000 each to develop project proposals for the final funding.
However, Drapers’ survey found that more than two-thirds of respondents were sceptical that the fund will help independent retailers.
One said: “[Prime minister] Boris Johnson is not to be trusted. Any local help and development spending promised by the Tories pre-election will simply be flung out post-election.”
Independents expressed exasperation at “retail giants [creating] a discounting culture that is hugely dangerous to retail”, and called for more government support to guard against increased overheads, and competition from retail parks and online shopping.
High streets minister Jake Berry would not comment because of the pre-election purdah.
While the country remains in political and economic turmoil, the retail sector will struggle to get the attention of government. However, without its support, the future for independents is uncertain.
Drapers’ survey of independent fashion retailers shows how this pioneering sector is battling competition and economic uncertainty.
Independent fashion retail: the big picture
Pressures and challenges
Independent retailers across the UK said they face many political and economic challenges. The main issues they cited included: Brexit uncertainty; high rents; high business rates; high parking charges and limited parking spaces; a decline in footfall; homeless people or begging on the streets; “constant” discounting from high street stores; online retail competition; “constant” requests for discounts; multiples launching CVAs/administrations [leading to closed shops on the high street], having to compete against the likes of JD Sports/Sports Direct [as people go to the larger retailers where they can access more exclusive product]; and a lack of good-quality and nice-looking shops.
How to fix the broken business rates system
An overwhelming majority of respondents said they would like to see business reform. Suggestions included: the abolition of business rates altogether; reduction of the business rates multiplier; annual revaluations and performance-based business rates.
What government support do independent retailers need?
A main focus of the survey was to investigate the level of local and wider government support available for independent businesses. Respondents were pessimistic about help for independents from the £1bn Future High Streets Fund – a government initiative to reinvent town and city centres. Responses heavily indicated a lack of support from both local councils and national government. One independent warned: “If government doesn’t act soon, there will be a lot of business failures in spring 20.”
About the survey
- Carried out online between 12 September and 18 October
- 133 respondents across the UK and Ireland: 33% in the south-east of England (including London), 15% in the east, 13% in the south-west, 9% in the north-west, 9% in Scotland, 8% in the north-west, 8% in the West Midlands, 6% in the East Midlands, 6% in Yorkshire/Humber, 4% in Wales, 2% in Ireland, 2% in the north-east, and 1% in Northern Ireland
- 42% run or work for a womenswear independent, 8% menswear, 5% childrenswear, 8% footwear. Others sold a mix of categories
- 66% of respondents have one store, 16% have two stores, 9% have three, 2% have four, 2% have five and 5% have more than five
- The oldest independent retail business to take part opened in 1888, while the most recent opened in 2019