Region's retail and hospitality businesses left reeling in run-up to Christmas

Shoppers in Ipswich town centre.

Retailers and hospitality businesses are seeing the effects of the rise of the Omicron variant - Credit: Sarah Lucy Brown

East Anglia’s hospitality and high street businesses are on the ropes again as the rise of Omicron crushes previously high hopes of a strong Christmas bounceback.

Battered businesses are set to endure yet more pain as householders and companies dial down their festive socialising plans in response to the latest coronavirus threat to sweep the UK.

And as government ramps up efforts to get on top of the latest outbreak with Plan B, firms across the region are counting the cost of lost business.

Candy Richards, development manager for East Anglia at the Federation of Small Businesses (FSB) said companies were already suffering the effects of Omicron – and braced for more tough times ahead.

Her organisation is calling for government help to get them through the latest crisis – and fears that with the furlough scheme now a thing of the past many small firms which are the backbone of the UK economy will suffer severely.

Bookings were collapsing, and corporate events cancelled or postponed across the region as many adopt a cautious approach, she said. “It’s not clear-cut this Christmas. Some are really suffering, some are really benefiting from that renewed support from consumers – but this comes off the back of months and months of turmoil,” she said.

Businesses were bracing themselves for a rise in National Insurance payments in April, plus an increase in the Living Wage, while energy and other costs rocketed, she pointed out.

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With three in five people employed in small firms – which make up 99% of the total number of businesses in the country – their fate would be key to the UK’s future prosperity, she added.

“Confidence is really dropping at the moment because the outlook is really uncertain,” she said. “It’s making it incredibly, incredibly challenging.

“Christmas is a vital time for small businesses – from independent retailers to restaurants, pubs, and events companies. For many, it’s when they expect to do most of their trade for the year.

“While it’s certainly heartening to see more people shop closer to home this Christmas, small businesses are still experiencing an incredibly tough time with further uncertainty ahead. This is borne out by the latest GDP (gross domestic product) figures, which shows that the economy barely grew in October.

“With an already weak economic outlook, the Omicron Plan B restrictions are having a serious impact on our small businesses, particularly those within the hospitality, tourism, and events industries.”

She called on the government to act now to support those businesses hardest hit by Covid-linked disruption. 

Across the region’s high streets and shopping centres, the fall in confidence is also evident in the latest shopping footfall figures from retail analyst Springboard.

It shows a 3.2% week-on-week drop in numbers across all retail destination types in the East of England in the week beginning Sunday, December 5 – at a time when shopper numbers should be climbing ahead of Christmas. The figure for the region was nearly 18% down on the same period in pre-pandemic 2019 – and it was worse-hit than others across the UK, which averaged a smaller 1.1% week-on-week decline with high streets taking the brunt of it.

Plan B restrictions were taking its toll, admitted Springboard insights director Diane Werhle.

“The poor result on Saturday may well be the first signs of the impact of the Plan B restrictions which, although limited to compulsory mask-wearing in stores up to the end of last week, is likely to have increased nervousness amongst consumers around visiting busy destinations during peak shopping periods,” she said.

Hospitality boss Philip Turner, who, as head of the Chestnut Group, operates pubs across East Anglia, said the latest twist in the pandemic story was having an impact – although his own business is insulated from some of the worst effects. 

“It’s very obvious that cancellations are gathering pace, which effectively means that December trading is not as expected or budgeted. Those that are more exposed to town centres or large office parties will be experiencing effective “lockdown” without the financial support. Thankfully we are mainly destination and “smaller group” orientated – hence while seeing a drop-off it is less severe,” he said.

“On a positive note, the change in policy regarding those coming into contact with infected people from isolation to daily testing is a life-saver. While we are losing team to confirmed infections, we are not losing all contacts.”

The company is already operating a rigorous daily lateral flow to provide protection, he added.

But media speculation, a lack of data and “total mistrust in the government” was “a pretty toxic cocktail”, he admitted.

Alan Garner, managing director at Wisbech-based Fun4Events, which provides entertainment and activities for corporate, wedding and private hire events, said over just a few days his company had lost £20k to £25k worth of work as clients started to cancel or postpone their events. Although there were cancellation clauses, he faced a difficult dilemma over what to do to recoup lost funds with long-standing customers who themselves were caught in a difficult position while government wasn’t mandating that events should be closed down, he said.

His business was heavily hit last year when lockdown happened. After a summer uptick in 2020 with “the odd job here and there”, he eventually went to work in a Covid testing centre until the pandemic appeared to blow over.

As the threat subsided and the country opened up this year, his business – like many in the hospitality trade – boomed.

“From June this year it has been absolutely non-stop. We have had a really, really good summer,” he said. The strong recovery looked set to continue through the winter months – but it was not to be. After prime minister Boris Johnson’s announcements on the new Omicron variant, business plummeted.

“We have had probably 50% or 60% of our work cancelled or postponed for December and January,” he said. “That’s probably £20k to £25k worth of work.”

The situation was “disheartening” and “frustrating”, he said, and the message from government was “confusing”.

“It’s almost exactly the same feeling again but without that firm message from government. Everybody is clutching at straws,” he said.

“In one breath, workers are being asked to work from home and in another breath, they’re being told it’s OK to go out and attend the work Christmas party.”

Many of those involved in his industry are independent self-employed people and they were also losing out as a result of postponements and cancellations, he added.

“The hospitality and events side of things is hung out to dry really.”