Any other business owners noticed a big drop in turnover the last 1-2 months?

Dalby84UK

I am involved with 3 different UK businesses, each of them is in a totally different industry from hospitality, to car products and online services, and since covid they have had many ups and downs good times and bad and although Jan/Feb are usually quiet, however since Xmas this year all of them have been hit way harder than any other time now getting hardly any sales, turnover is less than 50% from a year ago for all of them not just one particular industry.

Have any other business owners noticed such a drastic drop the last 1-2 months, have consumers finally run out of money due to the energy bills/mortgage hikes? overheard someone the other day saying their monthly mortgage payment has gone up by £1000 per month not sure how most small businesses can survive if it carries on this bad for much longer.

martindow

I have had a fairly low number of transactions this year, but turnover has been saved by a few large sales.  I do find that business goes up and down for no apparent reason and have long since stopped trying to analyse and explain these variations.

Maybe you are right about bills and mortgage payments, but you can't really be sure of a trend by looking at only a couple of months.  Let's hope things look up for you soon!

lincroft1710

With fuel, food and mortgage costs escalating, obviously there is less disposable income, so less available to spend on non essentials. 

CKhalvashi

On the consumer-facing end, we've noticed a 2-3% drop in sales from our main activity, however we are targeted at an area enjoying a lot of public support at the moment. Operationally we have bounced back into profit on that side this quarter so far for the first time since early 2020 and shouldn't be far below Q2/19 levels next quarter if current trends are anything to go by. Quite a specialist part of a very large European market. There will be a slightly larger EU share of revenues than in previous years through a separate company.

On the b2b end we're doing exceptionally well at the moment with a large number of new 2-3 year contracts in the pipeline. This again is something you'd expect to grow in a recession and in a similar area (but different industry) with significant UK public support. In a lot of cases we can cut 20% from the costs of SMEs with a very high margin, specialist service, but still large enough that if we were to take the whole market we'd be looking at in excess of £1bn a year. We are more than on track for the 20 new jobs target for 2023 (please note I only took over the running of this late last year).

We've noticed a slight increase in travel services (although I haven't had chance to properly put management accounts together yet this year), but starting from a low number in the first place. Again, I'd expect us to grow as we're aligned (but not affiliated with in any way) the route network of Europe's lowest cost airline and aiming at destination substitution, so I'd expect to grow this year on this part of the business despite the largest S21 market being untouchable at present.

In short, I'm aimed at leisure/professional services in general but am in the markets that would expect to grow in this economic situation, not fall.

ComicGeek

I work in the construction industry, and there has been a noticeable reduction in larger construction schemes over the last 5 months. To the point where a number of consultancies are making redundancies as they don't have enough new large contracts coming in - that's from a massively unsustainable increase in work level during Covid, so is probably a case of returning to pre-Covid work levels rather than predicting a significant crash.

Peaks and troughs are pretty common over the 20+ years I've worked in the industry, and fortunately I work in a particular field which isn't so affected by these cycles. I do usually see the demand in the construction industry as an early warning for the wider economy, so I am expecting a general slow down this year.

Even the Bank of England states that one of their predictions for inflation falling this year is because 'people have less money to spend, we expect there to be less demand for goods and services in the UK.' 

Vectis

It's an odd one because only a matter of a few weeks ago it was reported in the press that travel companies were experiencing record levels of bookings for foreign holidays. Contrast that with the constant press reports of a cost of living crisis and it's difficult to understand what's going on.

As martindow said, I think you have to look at a lot longer term than 2-3 months to really see any trends. As you probably know from experience, it only takes a good month or two of sales to completely change the picture.

It does puzzle me though, the high level of holidays being booked whilst at the same time we keep getting bombarded by talk of cost of living crisis.

Jeremy535897

There was a time when doubling the mortgage interest rate meant doubling your monthly payment. Now it is a more modest increase. While food and energy costs have rocketed, reasonably well off people still spend a smaller percentage of their income on these costs than they would have done forty years ago. Travel agents are desperate for bookings and there are bargains to be had for foreign holidays. People want to escape the constant gloom and doom presented by the mainstream media, who focus on the impact of the rising costs of food and energy on poorer people who are disproportionately hit by big rises in food, energy and rent.

MobileSaver

Dalby84UK said:

Have any other business owners noticed such a drastic drop the last 1-2 months,

I can only speak as a consumer but here's my experience from a couple of weeks ago that I posted on a different thread.

MobileSaver said:

Obviously this is anecdotal but we've been out for lunch a few times in the last fortnight and the restaurants were literally packed.  We also went out for dinner one night last mid-week and while not packed the pub restaurant was very busy which I thought was impressive when food and drink for two came to £95.

Similarly a couple of weeks ago we shopped and had lunch in Merthyr Tydfil (hardly renowned for being a prosperous and vibrant Welsh town) and everywhere was teeming with people ... a lot of people out there have a lot of spare cash and they don't mind spending it...

Similarly we popped over the border into England mid-last week and had lunch at a huge garden centre with a large restaurant; again it was literally packed, just fifteen minutes after opening I noticed every single table except one was filled, with another four couples queuing at the entrance.

As others have said, the cost of living "crisis" may be affecting everyone but for a great many people the effects are negligible

DullGreyGuy

Vectis said:

It's an odd one because only a matter of a few weeks ago it was reported in the press that travel companies were experiencing record levels of bookings for foreign holidays. Contrast that with the constant press reports of a cost of living crisis and it's difficult to understand what's going on.

As martindow said, I think you have to look at a lot longer term than 2-3 months to really see any trends. As you probably know from experience, it only takes a good month or two of sales to completely change the picture.

It does puzzle me though, the high level of holidays being booked whilst at the same time we keep getting bombarded by talk of cost of living crisis.

For one we are being told its cheaper to go on holiday to XXX than it is to be at home with your central heating on.

Whilst its probably the exception rather than the majority there is pent up demand from the Covid lockdowns and people ultimately prioritise... having not been on holiday for 3 years due to covid etc people may decide its better to cut down other things and still get a cheap getaway (and with GCH savings it may not be as expensive as the headline rate says).

MobileSaver said:

MobileSaver said:

Obviously this is anecdotal but we've been out for lunch a few times in the last fortnight and the restaurants were literally packed.  We also went out for dinner one night last mid-week and while not packed the pub restaurant was very busy which I thought was impressive when food and drink for two came to £95.

Similarly a couple of weeks ago we shopped and had lunch in Merthyr Tydfil (hardly renowned for being a prosperous and vibrant Welsh town) and everywhere was teeming with people ... a lot of people out there have a lot of spare cash and they don't mind spending it...

Similarly we popped over the border into England mid-last week and had lunch at a huge garden centre with a large restaurant; again it was literally packed, just fifteen minutes after opening I noticed every single table except one was filled, with another four couples queuing at the entrance.

As others have said, the cost of living "crisis" may be affecting everyone but for a great many people the effects are negligible

Equally anecdotal but unless its a top flight place it seems more peaks/troughs than normal. Off days seem quieter than usual but the popular days (eg Thursday in the City) appear fully back to pre-Covid levels (maybe in part because of there now being less venues). 

Based on the ranting of various mid level chefs/restaurant owners on Twitter etc the cost of living increases havent been fully passed on to consumers and so relatively speaking its cheaper to eat out than it used to be (ie the gap in cost between eating at home and eating out is smaller)

CKhalvashi

DullGreyGuy said:

Vectis said:

It's an odd one because only a matter of a few weeks ago it was reported in the press that travel companies were experiencing record levels of bookings for foreign holidays. Contrast that with the constant press reports of a cost of living crisis and it's difficult to understand what's going on.

As martindow said, I think you have to look at a lot longer term than 2-3 months to really see any trends. As you probably know from experience, it only takes a good month or two of sales to completely change the picture.

It does puzzle me though, the high level of holidays being booked whilst at the same time we keep getting bombarded by talk of cost of living crisis.

For one we are being told its cheaper to go on holiday to XXX than it is to be at home with your central heating on.

Whilst its probably the exception rather than the majority there is pent up demand from the Covid lockdowns and people ultimately prioritise... having not been on holiday for 3 years due to covid etc people may decide its better to cut down other things and still get a cheap getaway (and with GCH savings it may not be as expensive as the headline rate says).

MobileSaver said:

MobileSaver said:

Obviously this is anecdotal but we've been out for lunch a few times in the last fortnight and the restaurants were literally packed.  We also went out for dinner one night last mid-week and while not packed the pub restaurant was very busy which I thought was impressive when food and drink for two came to £95.

Similarly a couple of weeks ago we shopped and had lunch in Merthyr Tydfil (hardly renowned for being a prosperous and vibrant Welsh town) and everywhere was teeming with people ... a lot of people out there have a lot of spare cash and they don't mind spending it...

Similarly we popped over the border into England mid-last week and had lunch at a huge garden centre with a large restaurant; again it was literally packed, just fifteen minutes after opening I noticed every single table except one was filled, with another four couples queuing at the entrance.

As others have said, the cost of living "crisis" may be affecting everyone but for a great many people the effects are negligible

Equally anecdotal but unless its a top flight place it seems more peaks/troughs than normal. Off days seem quieter than usual but the popular days (eg Thursday in the City) appear fully back to pre-Covid levels (maybe in part because of there now being less venues). 

Based on the ranting of various mid level chefs/restaurant owners on Twitter etc the cost of living increases havent been fully passed on to consumers and so relatively speaking its cheaper to eat out than it used to be (ie the gap in cost between eating at home and eating out is smaller)

I have noticed that with flexibility on flight dates it's a lot cheaper to be away than at home at the moment. I'm a smoker, tipping this balance further by around £7/day in Poland for example. I can be fully remote and all contracts allow outsourcing to any EU destination plus 4 other named countries with relevant protections in place.

My travel business interests focus on finding cheapest flights and visiting destinations off-peak, something I've done from the days of being very limited on funds and wanting to explore. This has been common in Israel for years, but definitely it seems the trend is spreading, especially post-Covid where people want to travel away from others largely.

tifo

lincroft1710 said:

With fuel, food and mortgage costs escalating, obviously there is less disposable income, so less available to spend on non essentials. 

Isn't that what the govt want by increasing interest rates to reduce inflation?