Businesses will cease to trade if there are more lockdowns, survey shows

* Ashley Rogers, commercial director of the Business Council.

A survey has revealed that 40% per cent of North Wales businesses across tourism, hospitality, retail and leisure say they will cease to trade if there are any more lockdowns.

The study, conducted by North Wales Tourism with support from the North Wales Business Council, also revealed that 17% of those who took part had already made people redundant as a result of the Covid restrictions – with many more job losses likely.

Almost a third of the companies that responded said they were planning more redundancies by the end of March losing on average 27% of their current workforce.

On top of that more than 30% said that any new lockdowns would mean further redundancies over and above those already planned.

According to Ashley Rogers, the commercial director of the Business Council, the findings laid bare the "catastrophic" economic consequences of the pandemic so far and what will happen without additional financial support from the UK and Welsh governments.

More than 360 companies from across the region took part in the Trade Impact Survey which was carried out over four days.

The aim was to find out how local lockdowns affected businesses and what impact any further lockdowns would have on them. 

For the average business, only 18% of their turnover was generated by local customers who live in the same county.

But for accommodation providers like hotels, guest houses, camping sites and caravan parks, only five per cent of their turnover came from locals.

Meanwhile, 69% of businesses said that trading is not viable for them under a local lockdown and they would need to close until travel restrictions were lifted.

Concerns were also expressed about the impact the crisis was having on the mental and physical health of people running the businesses.

Over a third said their mental health was badly affected while 13% said their physical health had suffered.

Mr Rogers said: “The data is clear, even with the existing and recently announced supports from both UK and Welsh Governments we are looking at major job losses across these sectors even without any further lockdowns.

“Should further lockdowns restrict travel and therefore access to North Wales for our main sources of visitors, the North West of England and the Midlands, then the majority of our businesses in these sectors are unable to trade viably, even if they are allowed to remain open.

“In the case of further lockdowns in North Wales or in our main customer markets, further financial support has to be provided to tourism, hospitality, leisure, retail and their direct supply chains.

“We will not avoid the catastrophic economic and mental health fallout in these sectors if more lockdowns are brought in, without further Government support and that needs to be coordinated between UK and Welsh Government, so that national Wales and UK wide schemes dovetail to support our businesses that are negatively impacted but allowed to remain open or required to close.”

Jim Jones, the chief executive of North Wales Tourism and the chair of the Business Council, said: “The private sector has responded with incredible speed to this call for live feedback on what is happening in North Wales and our businesses should be applauded for getting involved.

“This is in line with the huge amount of work and investment they have already undertaken to become Covid secure. One local hotel alone has spent £40,000 on making changes to their business.

“We understand that public health comes first but the results of this study shout from the rooftops what is coming down the line, if further lockdowns are put in place without further support.

“The private sector in our region needs two things, meaningful engagement around future lockdowns and the data that supports them and new financial support, should new restrictions be put in place.

“We are asking the public sector to do the right thing by our North Wales businesses and workers across the sectors impacted by lockdowns, and to engage with the private sector on a regional level.

“North Wales Tourism is committed to working with the Business Council and its membership and both Welsh and UK Governments to see how we can use this valuable data, to best support our region.”

Debbie Bryce, the chief executive of West Cheshire and North Wales Chamber of Commerce said: “The results of this survey lay bare the dramatic impact lockdown restrictions are having on the tourism, hospitality, retail and leisure businesses in North Wales.”

“Firms have put hard work and precious cash into making their businesses Covid-secure and must be allowed to operate unless there is overwhelming and clear evidence to the contrary. For those firms that are forced to close or reduce operations, there needs to be a clear exit strategy to prevent economic paralysis.”

“The survey reveals the stark reality that without further financial support from UK and Welsh government for those businesses affected by lockdowns, there will be catastrophic consequences for firms in North Wales.”

Mike Learmond, FSB North Wales Senior Development Manager, said: “Firms were already weathering a huge storm before the beginning of the firebreak lockdown, and this will only lead to more challenges for Wales’ business community.

“For some time, FSB Wales has been calling for Welsh Government to introduce a Tourism Hibernation Fund to provide a mix of grant and loan funding to those tourism and hospitality firms that have borne the brunt of the economic impact of coronavirus.

“These businesses need our support in order to manage the difficult winter months and still be able to come back in the spring of 2021.

“This survey lays bare some of the huge issues facing businesses and outlines just how important it is that we all consider supporting local firms whenever it is safe and possible. I would urge anyone who can to think about how they can support the firms that are the very fabric of our communities at such a critical time.”

Sara Jones, head of the Welsh Retail Consortium, said: “This survey provides a stark warning of the challenges ahead for the retail industry in North Wales. 

“The extent to which retail remains the cornerstone of our high streets and can remain the largest private sector employer will be heavily dependent on the decisions made by MSs and governments.

“Government support for retail during the pandemic has been substantial, but lockdowns and travel restrictions have had a devastating impact. With retailers’ revenues continuing to fall short more will be required.”