THE EFFECT OF COVID-19 ON DIFFERENT TYPES OF BUSINESSES From the first lockdown, starting 23rd of March 2020, firms in the UK have suffered due to multiple lockdowns which have taken place, which have left small businesses suffering as a result, with little to no financial support given from the government. Even large chain corporations such as John Lewis are struggling to maintain their revenues, as they recorded their first loss ever in 2020, which lead to a closure of 16 stores before the national reopening on the 12th of April. Even though the government has given some form of financial aid to 91% of small businesses in the UK, it hasn’t been enough to sustain them, as 81% of small businesses feel as if they haven’t had enough support from the government. 18% of businesses also think that it will take them 18 months minimum to recover from the pandemic and their financial losses, with an additional 20% thinking that it will take them three years or more, which isn’t sustainable for an entrepreneur with unlimited liability over their business to maintain. 64% of small businesses have had to take on a form of external finance to be able to sustain themselves. Because small to medium enterprises account for half of the total revenue generated by UK businesses and 40% of the labour force, this is a concern for the wider economy as they take up a huge percentage of the whole UK workforce. In May 2020, 4 out of 5 respondents to a survey said that their revenues had fallen due to the pandemic, which furthermore effects the government due to less corporation taxes having to be paid, which they need in order to cover rocketing medical expenses. Certain large chains have taken the hit as well as small firms, with John Lewis being a main example. By taking the decision to close 16 major stores due to their annual loss of 2020 being £517million, this has left 1,465 jobs under threat, which contributes to the rising unemployment rate, from 3.8% in 2019 to 4.7% in 2021. Many UK residents are starting to claim out-of-work benefits which reflects the consequences on this, rising from 2.6 million in April 2021 in comparison to 1.4 million in March 2020. However, some business owners do believe that the pandemic has had a positive impact on them, as 45% of small businesses have decided to change their business model, by doing things such as adopting new technologies, developing entirely new products, or expanding on existing product lines. Nearly three quarters of these businesses do envisage these changes to be permanent, which will help future profit margins to increase. The main business which has prospered coming out of the pandemic is Amazon, an online retailer, with their stock prices rising by $1,000 in just a few months, due to a surge in demand because of customers not being able to go to stores to make purchases; the amount of Prime subscription members increased to 200 million in 2021, with the subscriber base increasing by 25% in the last year. Online streaming services have seen a surge in demand, such as Netflix gaining 16 million new subscribers during the first quarter of 2020 as customers are seeking new means of entertainment due to theatres, cinemas, nightclubs and concert halls still being closed.
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