Thousands of independent high street businesses are at risk of collapse because of soaring debt levels incurred during the pandemic, according to a report by a former boss of Iceland and the DIY chain Wickes.
Bill Grimsey said the debt level of high street independents has more than quadrupled in the past year, with firms owing a total of £1.7 billion. The veteran retail boss said this would leave them vulnerable when government support measures are withdrawn and called for a government “forgiveness scheme” to write off taxpayer-backed loans for viable small businesses.
“Independents have experienced a newfound appreciation during lockdown,” he said. “But they’ve also had take on government-backed loans they would not have normally been able to get. Now they are struggling with a mountain of debt and need help.”
Grimsey highlighted the need for urgent action to reform the business rates system to encourage young online entrepreneurs to reach the high street. Many believe the rates unfairly place the tax burden on shop-owners.
Grimsey’s report also said that the fast-growing hair and beauty salon industry, worth £30 billion to the economy, had become more precarious, due to a lack of regulation on employment status and the increasing adoption of risky beauty practices administered by unqualified workers.
Grimsey has written two previous reports on the future of the high street, despite being regularly accused by Sir Malcolm Walker, Iceland’s founder and co-owner, of “grossly mismanaging” the frozen-food business. Grimsey was chief executive from 2001 to 2005.
Walker has said that “certain individuals pontificating on the grim future of the high street [are] perhaps reflecting their own track record of failure”.
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Covid loan debt ‘leaves small retailers fighting to survive’
