SHOPPERS must vote with their feet - and wallets - if bullish predictions from the CBI are to play out in full, a leading account has said.
Growth forecasts published today by the leading business group suggest the UK economy is set to return to pre-Covid levels by the end of 2021, a year earlier than expected.
The CBI said the economy is expected to grow by 8.2 per cent this year and 6.1 per cent in 2022, while the peak in unemployment will be lower than was previously forecast.
But many small and independently owned businesses still face a bleak future unless they are supported by their communities, according to the managing director of J F Hornby and Co, Paul Hornby.
He said: “The support given to businesses by the government has been excellent. But this ends
soon and many companies will be relying solely on the revenue they generate.
“We have seen a huge shift to online shopping during the pandemic as high streets have been closed and my fear is that smaller retailers will struggle to compete on price and convenience.
“Unless we see some sort of normality with a return of workers to offices, food retailers may also struggle, with reduced footfall, morning coffees and lunches hitting their bottom line.
“The message has to be ‘support local’. Make a conscious effort to use smaller businesses and put your money into the local high street.”
The economy is poised for “considerable” growth over the coming months despite the delay in ending the lockdown, said the CBI.
Its report pointed to the rapid rollout of vaccines and the “unleashing” of pent-up demand, although the CBI warned that stagnant productivity and business investment remained a problem.
The extension of the Job Retention Scheme into the autumn and expectations of a stronger economic recovery will lead to a lower peak in unemployment, it was predicted.
CBI director general Tony Danker said: “There are really positive signs about the economic recovery ahead this year and next. The data clearly indicates that there is pent-up demand and ambition across many sectors.
“The imperative now must be to seize the moment to channel this investment into the big drivers of long-term UK prosperity.
“Clearly this does not apply to the hardest-hit sectors from the pandemic who even now face continued delays and genuine challenges to stay viable. It would be devastating for hospitality, events or aviation businesses to fail on what we hope is the last leg of restrictions.”
Paul added: “I hear the phrase pent up demand every day, and I agree, we will see a surge in activity and spending when so-called freedom day arrives and in the months that follow.
“But we must also keep a keen eye on the medium to long term. The additional finds people have now will not last forever and the furlough scheme, which has been artificially keeping many people in employment, ends soon.
“I’m optimistic about the future, but cautiously so and believe we all have a part to play in ensuring smaller businesses - which are the lifeblood of many of our high streets - are supported.”