On London street, virus forces small shops to adapt or close

In late October, Matthew Jones was enjoying a rare “bit of normality” at his London barber shop in a year that has been short on that. He was cutting hair and laughing with colleagues — when the news landed that the business would have to close for the second time.

Jones, 43, endured 15 weeks without any income after the three Sharpes barber shops he co-owns were forced to shut in the spring as the government imposed restrictions to slow the spread of the coronavirus The shops, including a tiny one in east London’s trendy Hackney neighborhood, had been open for four months when Prime Minister Boris Johnson ordered a new lockdown.

“It was a body blow for everyone that works here,” he said. “You’re just building up your business again, trying to get back to a normal lifestyle. And then all of a sudden it’s all taken away.”

As in much of Europe, the United Kingdom saw a sharp resurgence of COVID-19 infections this autumn, and officials imposed a second round of severe restrictions. The suffering has been especially acute in the U.K., where more than 57,000 people have died in Europe’s deadliest outbreak and the economy has plunged into the worst recession on record.

While small businesses all over the world are struggling as the virus forces many to close outright while also remaking consumer habits, many in the U.K. are facing the double whammy of the pandemic and the economic uncertainty caused by Britain's exit from the European Union.

___

EDITOR’S NOTE — Small businesses around the world are fighting for survival amid the economic fallout from the coronavirus pandemic. Whether they make it will affect not just local economies but the fabric of communities. Associated Press journalists tell their stories in the series “Small Business Struggles.”

___

Many British businesses managed to survive the spring lockdown with generous aid from the government, including grants like the 10,000-pound ($13,300) one Jones received and a program that pays a portion of wages to workers whose employers are struggling. The measures have helped keep the unemployment rate relatively low at 4.8% — though it has been rising and is forecast to hit 7.5% next spring.

The latest round of restrictions could pack a bigger punch, coming smack in the crucial weeks ahead of Christmas. Even before the second lockdown was announced, a survey conducted by Britain’s Office for National Statistics showed that one in seven U.K. companies reported having “little or no confidence” they would survive the next three months.

Jones estimates that the pandemic wiped out 60% of his income this year. With his shops closed, the single dad, who has a 10-year-old daughter, is doing odd jobs on building sites — and praying that business will return enough to ease the pain once restrictions lift on Dec. 2. The five other barbers who work in his shops are self-employed, and trying to scrape by as well.

“It could be really tough if it carries on," Jones said, as he put up Christmas lights in his empty shop on Hackney's Broadway Market.

Hackney has seen steady gentrification in the past two decades. Located in London's historically gritty East End, the borough was once known as the home of a stretch dubbed “Murder Mile," but Hackney is now filled with trendy bars and expensive apartments.

Broadway Market itself is lined with some 60 small shops, cafes and restaurants, and before COVID-19 hit, the street would throng with locals and tourists coming for the hugely popular weekend market. These days, some shops are doing better than others, but everyone is scrambling to adapt.

Jane Howe, who has run Broadway Bookshop since 2005, said the weekends would often get so busy that her shop would take in thousands of pounds in sales per day on the back of 7.99-pound books.

For a shop that relies heavily on foot traffic, the cycles of coronavirus restrictions have been hard. In June, Howe launched a website for the first time.

Even once her doors reopened, the tiny space meant she couldn't welcome back her usual crowds. Sales from the website don't come close to making up for the in-person ones she's lost — especially during the crucial Christmas period, when her shop typically rakes in a third of its annual sales.

“We’re missing out on the impulse buys, the ‘sweetie by the till factor,’” she said.

With the shop pulling in just over half what it used to, Howe has stopped paying herself and, when one of her two employees left, she was not able to replace her.

Like Jones, she’s managed to keep paying the rent thanks to a government grant. She has also taken out a 50,000-pound state loan.

“What we are doing, which is our best, I think is working for the moment,” she said.

Others haven't fared as well. A much-loved bakery next to Sharpes that was part of 66-year-old family-run chain closed for good, Jones said.

Percy Ingle blamed the closure of its 48 bakeries on many factors that predated the pandemic, including rising rents and wages and the likelihood that the low-margin business wouldn't provide a good return on needed capital investments. Like many businesses, even those that were allowed to remain open, it shut for several weeks in the spring before reopening with safety measures.

The bakery closure stands in contrast to a trend seen on much of the street, whose butchers, fishmongers, greengrocers and delis have done relatively well thanks to a surge in interest from fairly affluent locals who are now working from home and doing more shopping in the neighborhood.

Popular coffee shop and roastery Climpsons struggled to adapt at first — the cafe was shut, the wholesale business almost completely wiped out, and 34 of the company’s 42 workers went on the government furlough scheme in the first weeks of the pandemic, co-owner Danny Davies said.

But now on weekdays, Climpsons often serves more take-away coffees than before the pandemic. That makes up for losses on the wholesale side, which supplied restaurants and offices.

“There’s the suburban community high street success story I think, which is a lot of great local businesses are thriving — much higher sales than before even, if they sell things that people can grab and go home with,” Davies said.

Down the street, Grigorios Vaitsas says business at his deli, Isle of Olive, has not been too bad, even though he closed his small indoor cafe and Christmas shopping events have been canceled.

But Vaitsas and his partner, Paulina, who import their products from Greece, have been losing sleep over another threat: Brexit.

The couple are worried about the tariffs and bureaucracy if Britain leaves the economic embrace of the EU at the end of the year with no deal in place. That combined with the pandemic makes a “perfect storm,” Vaitsas said.

“We are holding our breath,” he said.

Vaitsas laughed when asked where he sees himself in six months. He says he's “operating on a week by week basis.”

Other business owners agree that they don't have the capacity to think too far ahead.

“Most business people sort of wrote this year off…. Let’s just keep our heads down, pay our bills, pay the rent, and try not to worry,” said Jones. “And next year is another year, and we can start again.”