Businesses Are Counting Their Losses: The Coronavirus Effects on UK and Global Businesses

Hello Pynksters :mage:

The last month has kept people, governments and markets alike on the edge of their seats. News about the efficacy of late-stage trial vaccines from Pfizer and Moderna have brought back hopes that a life without the pandemic does not constitute wishful thinking. In a world where the normal duration of vaccine trials is 10 years, releasing an effective vaccine in less than a year represents an astounding achievement for the medical community. Now that we can put vaccine discovery behind use, vaccine production and distribution seem to be a non-problem. Is that it though? Well, not really.

With a recent report in the Guardian claiming that 1 in 7 businesses have ‘low or no confidence that their business would survive the next 3 months’, it seems there may be tough times ahead for businesses, still reeling from the effects of prolonged periods of lockdown.

It doesn’t come as a surprise that the most vulnerable businesses are SMEs. According to the Federation of Small Businesses , there were 16.8 million people employed by SMEs in the UK, making up 61% of the total UK workforce, generating a turnover (i.e. sales) of £2.3 trillion, which makes up 52% of the total turnover in the UK private sector.

Which UK, EU or US SMEs do you believe do particularly well despite the fallout from the pandemic?

*In your opinion, what UK, EU or US companies don’t stand a chance of survival over the next 12 months?

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It seems that those who suffered most here in US are restaurants and bars. Being restricted to one fourth and even one half capacity is really taking a toll. They need to fill the seats to profit and they are barely surviving. Some just didn’t make it at all.

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[Here’s a link to that ONS release on the business survey: “Business insights and impact on the UK economy: 3 December 2020” - the one in the article doesn’t really go anywhere.]

Must confess that I do get a little bit angry by news-paper articles that are high on sensationalism and low on statistically contextualised reporting; although I do appreciate the attention span of the average click-bait ‘victim’ is probably only around 15 seconds and therefore in-depth reporting is likely considered by Editors to be beyond the remit of the ‘daily’ news-sites.

Businesses fail all the time. In the UK, the so-called ‘death rate’ of UK businesses in the period 2016-2017 (the latest available figures, afaics) was 12.2%. On that basis, I’m thinking the quoted “one in seven” doesn’t compare too unfavourably, given the extreme circumstances.

I’d also criticise the article for it not featuring more prominently the time frame(s) which the data covers; some of which is now more than a month old - and at least two weeks old - and therefore will not reflect the most recent news events around vaccination developments and their undoubted effects on sentiment.

That all said, I equally acknowledge the devastating impact CV-19 has had on many small business owners.

Being partial to good, no-nonsense restaurants, my partner and I frequent a number of small (sub-20 covers), owner-chef eateries which, according to social media updates, have either closed permanently or are unlikely to re-open until it is permissible to have 100% occupancy again.

In a similar vein, my preferred barbers - a family business which I have frequented for over 30-years - has also permanently closed up shop. At least, in this case, home-visits are available - but going to the barbers was something of a ritual, and I miss that as much as having a decent haircut.

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Here in Italy we are pretty much un the same conditions Karen.
Restaurants and bars are suffering the most…they are actually the most bashed from the restiricting measures.
We came to the point of keeping them close in the first week of November and they are still closed to public. They are allowed just to work with the take away service.
Maybe next week they will hopefully open up but I doubt our Gov. will allow to stay open all day long. All of this reaaaaaaly sucks!!

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If not already gone, I don’t see many companies of the following sectors surviving into the summer without financial aid: airlines, cruise lines, restarurants & bars, non essential retailers, barber shops & salons (as mentioned above), hotels, spas, theaters, cinemas, gyms and tourist related services.

As for the companies that have benefited, it is somewhat history, but besides the tech giants: Peloton, Docusign, Zoom, Slack, Shopify, Rappi, JD, Mercado Libre, Etsy, Nintendo, Blizzard, Deliveroo, Concentra, Home Depot, Puzzle Warhouse… to just name a few.
Drive-in cinemas, liquor stores, cannabis dispensories, remote health providers, all have benefited greatly from covid 19.

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I think most SMEs won’t survive if they don’t restructure their process or the way they operate. Like working from home to reduce cost etc. Those businesses with the financial muscle might be able to hold on a little long but can’t say for how long. Let’s hope the vaccine is effective so that it gives businesses a breathing space.

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TLDR, my guess for doing OK SMEs:

  • web hosting, web design, web coding (especially e-shops)
  • local internet and TV providers
  • App developers
  • Books distributor

I have no data on that, just came to my mind based on recent experience.

Our company paid for a new website. With all the lockdown or not possibility to do shopping online, every business needs to do some online selling.
So I would guess that all SME companies related to website design, coding and web hosting should be doing well now. There are many small web-host providers in every country.
Then I would guess that local internet providers, cable TV, should be doing well these days.
Maybe also some App developers.
Through Web Summit I found a company Fitify, that is working on an App that helps to exercise at home. I tried that few times and I really love it. Thinking to pay to unlock more features there.
Another app I found is about learning language. So maybe while kids are at home, some kind of self-study apps may see purchases from parents of these kids so that parents can rest :slight_smile: (kind of my case, I prefer to give some gamified education to my kids rather than just pure games).
Another SMEs I am thinking about are book distributors. I just guess that while doing home office or being closed, people may reach for some books to take a rest from being online.

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Really I don’t know what will happen with the vaccine, but I hope it will be at most a little effective, to stop the virus in some way and to be able to reactivate the economy again.

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UK, EU or US SMEs do my believe do particularly well despite the fallout from the pandemic these are pharmaceutical companies and most online projects and delivery

In my opinion, UK, EU or US companies don’t stand a chance of survival over the next 12 months :smiling_imp: This is of course a joke . But I think it will be hard for most transportation, travel and entertainment.

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I think all sectors are equally affected.

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Yes they will be able to survive if the government still support them financialy

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Most countries exempted agri-food systems from “lockdown” policies introduced in early 2020 to curb the COVID-19 outbreak. Yet these policies had economywide implications, implying that even exempted sectors were indirectly affected by disruptions to supply chains and falling consumer demand. After its first confirmed case, Nigeria’s federal and state governments implemented lockdowns across most cities and states. This included closing all borders and many non-essential businesses. Nigeria also faced declining remittances and export demand caused by the global recission. We estimate the economywide impacts of these lockdown policies and global shocks using a multiplier model of Nigeria calibrated to a 2018 social accounting matrix. We simulate Nigeria’s 8-week lockdown (March–June), as well as “recovery” scenarios until the end of 2020. Simulations draw on information from official data, policy announcements, and interviews with government agencies and private sector and industry groups. Findings indicate that total GDP fell 23% during the lockdown. Agri-food system GDP fell 11%, primarily due to restrictions on food services. Household incomes also fell by a quarter, leading a 9% points increase in the national poverty rate. Given the scale of these economic losses, our recovery scenarios indicate that, even with a rapid easing of restrictions and global recovery, Nigeria is unlikely to escape a deep economic recession. We conclude that, while food systems were exempt, they were not immune to the effects of COVID-19. Protecting food supplies should be a priority alongside government efforts to address the health consequences of the pandemic.

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I am so incredibly cynical when it comes to believing that any government would follow such recommendation. “protecting food supplies”, in my book, would be to prevent transnational billionaires and corporations from getting monopoly on land ownership, any country’s water resources and copyrights over nature itself.
“address the health consequences” of pandemic is worth nothing if we do not address the health consequences of standard western diet and the way it plays havoc with our immune system.

I am not holding my breath.

Eva

PS. I obviously mislaid my optimism today. Note to self > find it fast, or you’ll stop being invited to any parties. :joy:

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Ok , I think fo the British government to raise in it economy in this period of covid19 season is to remove national lockdown and prevent people from abroad to enter in the country

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Welcome to the Pynk community @Msola! I’m glad you joined us here. I agree with you about not letting people from abroad entering the country. Many countries have implemented that policy. Too soon though in many areas to remove lockdown. CoVid can and will be contained, but we are learning it takes time. Many businesses are getting creative to keep customers, while many have also suffered.
Stick around and read some of the many interesting topics and what other Pynksters have to say…and share your thoughts.

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SMEs are suffering through the pandemic non-stop, with the tourism and restaurant sector suffering the most. But I read on the NYT about ePlastics, a small plastics fabricator that increased their sales up to 30% having project for the Navy and NASA. There’s still hope for SMEs that happen to have the correct business during the hardest of times.

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The uk has been hit hard with companies closing left right and centre. over the pandemic i have been made redundant and also had 2 other jobs before my current job. Personally the hospitality industry has been hit super hard especially the gig economy with people not being able to hold or go to events. I know a large portion of my friends who are artists and djs have had to get new jobs after years of being able to live on there gig wages. A plus is alot more restaurants and eating establishment have branched out into doing takeaways this has allowed me to keep my current job which i feared i would lose as the company i work for is fairly young company and within a week of my store opening we were back into lockdown. With restrictions slowly lifting in the UK i hope to see a re-emergence of small businesses and also the economic recovery of the UK

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