Britain’s record economic slump in April during the first full month of the coronavirus lockdown has put businesses across the country on the brink of financial collapse.
The Guardian has spoken to three company bosses about the pressure they and their employees are facing at the onset of the deepest recession in living memory.
Just two weeks in April wiped out the equivalent of a year’s profit for Waterfields bakery in Leigh, after the coronavirus crisis forced all 35 of its shops dotted across the former south Lancashire coalfields to temporarily close.
“If we weren’t careful we’re going to go under like other businesses,” said Richard Waterfield, chairman of the family-run firm established in 1926. Though it survived the second world war and damage to the local economy inflicted during the miners’ strikes, Covid-19 has had an altogether bigger impact.
While lockdown measures led Britain’s economy overall to shrink by a fifth in April, the food and drink sector was one of the hardest hit, plunging by 89% in a month.
“I’m 63 now and I cant remember not having a good nights sleep until recently. But we will survive. I plan to see in our centenary,” said Waterfield.
The chain usually sells more than 30,000 of its much-loved sausage rolls and loaves a week, but during lockdown Waterfields furloughed 100 of its 350 staff to stay afloat. Although it is gradually reopening with social distancing measures in place, sales are expected to remain depressed until Christmas at least, particularly in town centres such as Warrington, Widnes, St Helens and Leigh where footfall has fallen most.
“I don’t think that town centre trade will ever come back,” said Waterfield. “The high street is going to change without question. We feel as a business there will remain an awful lot of people working from home, certainly this side of Christmas.”
Production volumes halved within 72 hours at Midlands-based manufacturer Corbetts at the start of lockdown, forcing the business to close one of its two metal galvanising plants and furlough almost half of its 72 employees.
Set up in 1860 as an ironmonger in Telford close to the world’s first iron bridge, the company faces a recession this year deeper than at any time in its entire history.
“April was really quite catastrophic for us and we really had to think on our feet,” said Sophie Williams, finance director of Corbetts.
Manufacturing output across the country collapsed by a quarter in April, according to the ONS. While sales slumped for Corbetts, contracts to provide galvanised steel cable holders to fit out the Nightingale hospitals in Birmingham and Manchester helped the company keep running.
Williams said redundancies would be likely as the government’s furlough scheme is wound down, but added that the outlook was starting to improve. “It’s difficult to forecast where we’ll be in three months time but the general consensus is getting a lot better,” she said.
York Emporium, Yorkshire
Laurence Beardmore’s coffee roasting business York Emporium had no money coming in at all from late March until mid-May as lockdown shut the cafes and restaurants it supplies across Yorkshire.
“It was like a tap turning off,” said the 55-year old business owner, whose firm employs 85 people and would usually sell about100 tonnes of coffee a year. “I’ve been through lot of recession in my life from the 1980s onwards, but there’s been nothing like this. It’s unique.”
A prominent member of the local chamber of commerce, Beardmore warned the government that continued support for firms would still be needed long after lockdown measures are lifted.
“The choice is support it or let it go, that’s the stark choice. If the tap turned on again great we’d recover but it’s going to come in drips so that support needs to continue,” he said.