Top accountant fears the worst for businesses fighting for survival

August 22, 2020

A leading accountant has spoken of his fears for the thousands of town and city centre businesses which are locked in a desperate battle for survival.

Paul Hornby, managing director of accountants at JF Hornby Ltd, believes a seismic change in the way office-based employees are now working will continue to have a profound effect on retailers for the foreseeable future.

He fears many businesses reliant on high footfall from office complexes will be faced with financial challenges which may ultimately be insurmountable.

He said: “The recession we predicted is now upon us - and my fear is that it will be some time before we see a full correction.

“The businesses which will find it hardest to weather the storm in my view, are those which rely on high street footfall.”

Despite UK tourists providing a massive financial boost across the country, including the Lake District, life in the retail world is unlikely to ever return to its pre-Covid position.

With the UK crashing into its first recession in 11 years, several leading retailers, including Debenhams and Marks & Spencer, are already feeling the impact and have announced further job cuts, with the former also appointing a firm to draw up contingency plans for a possible liquidation.

Figures show the economy shrank 20.4% between April and June compared with the first three months of the year.

The two consecutive quarters of decline caused by the Covid-19 lockdown pushed the UK officially into recession.

Figures from the Office of National Statistics also show around 650,000 UK employees have been made redundant since the country went into lockdown. This number is expected to dramatically increase with the furlough scheme soon coming to an end.

Chancellor of the Exchequer, Rishi Sunak has said the government should not pretend that "absolutely everybody can and will be able to go back to the job they had".

“There has been a seismic shift in the way many businesses operate,” continued Paul, “with variable shift patterns introduced, more people working from home and fewer people in town and city centre office complexes.

"That means a reduction in footfall, leaving cafes, food businesses and general retail shops with the same overheads to meet, but less in the way of trade.”

Staff at JF Hornby have been working tirelessly helping businesses across the North West to try to survive this economic downturn.

Paul said: "We deal with hundreds of small businesses and many of them are fearful for the future. It is difficult right now for them to see a point when trading will return to pre-Covid levels.

"Unfortunately, we will inevitably see some of these businesses cease to trade. The Chancellor has done a fantastic job of keeping the economy afloat - but his support packages cannot be provided indefinitely."

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