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

[RazvanPaun]

Hello Pynksters

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.

One in seven UK businesses 'on brink even before lockdown'

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?

[KarenM]

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.

[PynkIan]

[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.

[Tradelta]

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!!

[mosigman]

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.

[kaabayahaya]

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.

[Marek]

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 (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.

[ejcabanillas]

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.

[DenzelEtherio]

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 This is of course a joke . But I think it will be hard for most transportation, travel and entertainment.

[bizstha]

I think all sectors are equally affected.

[olpsxtian13]

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