My shop's costs have gone up 40% in six months - high streets are facing disaster: David Skaith

Out-of-town shopping centres, online shopping habits and huge rents and rates have all impacted the high street. Many of our traditional retailers have since fallen away and are no longer in business.

In 2020 we had a global pandemic which saw businesses up and down the country close their doors.

Many were able to adapt by trading online but most had to lay in wait for the day they could open once more.

During this time we saw grants, loans and furlough given out, all in aid to keep these key businesses able to come back and open once more.

Fast-forward to our high streets reopening and many places reported great trade.

York alone saw strong footfall in the summer of 2021, only down 3% compared to that of 2019. Most retailers saw great sales and we appeared on the surface to be on the up.

However, retailers were open once again, but at what cost?

Most now had huge debt, Bounce Back Loan repayments, credit cards taken, overdrafts extended, all done to keep our stores open which all need to be repaid. Our safety nets have gone.

The last thing we needed was another crisis.

As lockdown ended, 2021 and into 2022 saw good business for many.

York was seeing good footfall, people were coming back to the city and tourists where visiting in strong numbers - many spending money they had saved from not holidaying for the past two years.

Slowly things seemed to be going in the right direction.

Unfortunately things have started to slow down. People’s spending seemed to slow, footfall dropped, hotels saw fewer guests and businesses saw their costs increase - a recipe for disaster in the making.

Thousands of small retailers across the country are seeing incredible cost increases, from smaller things such as shop insurance, broadband or postal charges, to the much larger outlays such as energy bills.

If you are also in business which relies on importing products into the country, then this adds another huge pressure to finances.

As an example of this my own shop, Winston’s, sells organic T-shirts and sweatshirts designed by us and printed in Leeds.

We use high quality garments which are imported into the UK, our printers then add our designs and ship them to us.

Every single stage of this process has increased in price, when you add in all the other increases we have seen, it now costs me 40% more to run my business today than it did six months ago.

Short term costs can, on occasion, be swallowed.

You would normally have reserves, the option to take credit, even extend an overdraft if it meant you could get through a tricky two or three months.

The big issue is most of us have eaten away at those options already.

Obviously the increases businesses are seeing are not limited to just them, people’s spending power has dropped dramatically due to the cost of living crisis.

At a time when shops need people spending, people just don’t have the money to spend.

So what do we have?

Businesses carrying debt like they never have before, virtually all costs of running their operations increased and people facing a cost of living crises the likes of which have not been seen for decades.

To say we have a disaster coming for businesses across the country is not an exaggeration and our high streets could face the brunt of it.

How long can our retailers last?

Businesses have gone through so much already and they are on their knees.

I’m not sure how much more we can take on.

If the cost of doing business continues to rise like it is then I seriously worry for the future. Many previously viable shops will struggle and will disappear for good.

David Skaith is owner of Winston’s of York