Re-opening: small businesses in Central Birmingham

Without the office workers, students and shoppers, some of Central Birmingham’s small business are precariously close to shutting down permanently.

Birmingham planners and marketeers have spent years building up the Second City’s* reputation as a great destination for shopping with a thriving scene for independents. Is coronavirus killing small businesses? Tide writer Suzanne Worthington hopped on an almost-empty commuter train to find out.

• Barber – Goodlife
• Shoe shop – Sims Footwear
• Café – Morridge oats + coffee
• Clothing shop – Liquor Store
• Gift shop – Smithsonia
• Market traders – Bull Ring Rag Market
• Market traders – Bull Ring Indoor Market

* Forgive me, I’m biased because I’m a Brummie: Birmingham is England’s Second City.

Major city centres are often quieter during the summer as workers take holidays, and university and school students are away. But 2020 is different.

This year there’s no certainty that city centres will ever be busy again. Big retailers like John Lewis have already announced their Birmingham store is to close permanently and without both passing trade and the attraction of the major stores, what hope is there for small businesses?

From Snow Hill station, I headed straight to Great Western Arcade. Concealed under the modern skyscrapers of the city’s finance and business district, the arcade is well-known to Brummies as an architectural gem and home to some interesting and high-quality small businesses.

Shops in the arcade rely on footfall. Previously thousands of people a day passed through, going to and from Snow Hill Station and their workplace. Add to that hordes of shoppers who used to arrive on the train from all over the region. Today, these potential customers have vanished.

Goodlife Barbers

At stylish gents’ salon Goodlife, barbers Sally and Declan were waiting for their first clients of the day. When the Government announced salons could re-open, the team used their booking app to notify existing clients and the bookings came flying in.

The first week was very busy and prospects looked good. But now business is tailing off. Initially it seemed commuter clients who are now working from home were happy to travel to the city centre for a haircut from their favourite hairdresser after months in lockdown. But now what? Perhaps they’re supporting a barber on their local high street.

Goodlife also has a barbershop in Worcester so the small company was eligible for two small business grants. The central Birmingham shop has six staff and most are self-employed. Sally and Declan were among the UK’s unfortunate sole traders who didn’t receive the Government’s Self Employed Income Support because they only became self-employed in 2019. Both applied for and got Universal Credit. Sally points out the irony that with the Government’s support for apprentices, the most junior of the shop’s team is currently earning more than she is.

The team are good-humoured about the ever-changing rules – they could trim beards, then they couldn’t, now they can again. The shop manager keeps staff updated on the rules but the team just want to work. As self-employed people, each client means income. And if they can’t offer all services – for example, they currently can’t offer a cut-throat razor shave – it’s limiting their ability to earn.

Some of Sally and Declan’s clients have told them they’re keen to return to working at the office – they miss the buzz of the city and they’re keen to separate their work and home environments. The friendly staff at the shop also clearly miss the buzz of their clients popping in.

The salon’s owner must be optimistic clients will return: Goodlife are aiming to take over a recently-vacated larger unit in the arcade which has two floors. For the vacating company – a bridal boutique – the crisis killed their business. But for Goodlife, moving to a larger unit could bring a new lease of life.

The team are excited about offering more treatments and welcoming back more clients, old and new. Now that many consumers are more mindful about how they spend money, seeking out quality and customer service, Goodlife in Birmingham will succeed if and when the city’s workers return.

Sims Footwear

In the middle of Great Western Arcade, the bright lights of Sims show off the store’s footwear. But this isn’t a designer store. Whether you’re after chunky boots, a fancy pair of heels or something comfy for summer, Sims has something for you with a price tag to make you smile.

Store owner Paul Lamb has been selling shoes in Birmingham for over 20 years. His store is the only independent footwear shop in the city centre.

When the Government announced it was possible for shops to re-open, Paul did what he’s always done: opened the doors and got on with selling shoes. He put two staff on furlough, claimed the Government grant and installed all the recommended safety measures. But one vital thing is missing: footfall.

Sims has moved around over the years, at one point running three shops including an accessories booth in New Street Station. Sims settled in the current unit four years ago and, like the other stores in the arcade, pays around £1,000 a week for the privilege.

Without the footfall and consequent sales, how will the arcade’s stores pay this rent? Many don’t know. Shop owners understand the arcade’s bosses, the city council and HMRC all need to recoup money – but money is running out. Paul believes the real impact on central Birmingham’s small businesses will manifest in winter 2020/2021 when Government grants have been spent, the VAT and tax deferral periods finish, and loans have to be repaid.

As someone who’s been trading for more than two decades, Paul has advice for small business owners and those thinking about starting their own business: plan your escape route. Build your savings, pay into a pension and make sure you have a plan for what you’ll do if it doesn’t work out.

Morridge oats + coffee

At Morridge café, brother and sister team James and Naomi Morris embody the optimistic spirit of new small business owners.

Culinary Arts Management graduate Naomi has the ideal training for her vocation – plus stacks of brains, inspiration, and the warm, energetic personality to draw both customers and great staff. Her brother, numbers whizz and self-proclaimed coffee nerd James, brings his full barista training and experience (honed at Monmouth Coffee in London) to Morridge in Birmingham – as well as his classic rock and indie record collection!

Naomi founded Morridge in 2019, starting out as a trike-cart selling… you guessed it, porridge in the arcade. (The name comes from her surname Morris + porridge.) Trade was busy, with commuters picking up a healthy breakfast as they dashed to work.

The arcade managers offered Naomi the old Druckers unit at the Temple Row end of the arcade and, after a hard look at the figures, the pair set about converting it into a modern brunch café.

Builders got started and one week later, lockdown kicked in. Instead of the planned five weeks, the conversion took eleven weeks as the builders staggered shifts and the steel and glass they needed wasn’t available. It couldn’t be a quick fit-out – the café needed to be sympathetic to the arcade’s architecture while conforming to modern safety standards.

Morridge has now been open just eight weeks but the vintage décor looks much more established. James’ soundtrack and vinyl collection add to the café’s 70s vibe. When I visited, customers were perched at the window or settled in armchairs upstairs, enjoying oats and coffee at half price thanks to the Government’s Eat Out to Help Out scheme. 

Despite the low footfall in the arcade, Morridge has a steady stream of customers. The café takes bookings for brunch and is particularly popular on Saturdays with shoppers and residents from the Jewellery Quarter.

Despite the absence of office workers, Naomi and James say they’re optimistic because they have no other choice. But small businesses need more than just optimism – fortunately, the Morridge team are fizzing with ideas about how to adapt and innovate.

Liquor Store

Not an off-licence, Liquor Store is a men’s clothing boutique. Customers love their high-quality Japanese denim, Redwing boots, Patagonia jackets and the Universal Works shop-within-a-shop. And before lockdown, city workers loved the store’s not-very-secret speakeasy bar in the basement. Which is so well hidden I couldn’t find it. (The bar is currently still closed because it’s too cosy to be Covid compliant.)  

Owner Phil Hazel established his business in 2012 and settled at the current location on Colmore Row in 2017, in the prestigious converted Grand Hotel.

Before lockdown, the store was busy with customers popping in during their lunchbreak, between meetings or on their way home. It’s such a destination that even Londoners visiting Birmingham for a meeting would seek out the shop.

During lockdown, Phil continued engaging with customers, inviting them to help him fill the shop’s Instagram feed (@liquorstoreclothing) with photos of themselves wearing items from Liquor Store. The result is a fascinating insight into who his customers are and how they wear the gear.

When the shop was able to re-open, to help entice customers back and to spend a while browsing, Phil partnered with local coffee roasters and café Quarter Horse to offer free cuppas.

He’s also excited to get the Nudie jeans repair station up and running – as a sustainability measure, the Swedish denim brand is famous for offering free repairs and Liquor Store is the UK’s only repair station outside London.

Regulars have been supportive. Some are so keen to see their favourite boutique survive that they offered to buy vouchers now to redeem later against clothes for this winter or next year.

As for the store’s suppliers, they all need paying and many have been understanding. They have to be: Phil tells suppliers they can either wait for their money or the store will send back the stock.

For the rest of 2020, Phil is taking it one day at a time. After a slow start during lockdown, online sales have picked up as people start socialising again. Customers are treating themselves to a new shirt or boots, and good quality clothing always makes a great gift.

Smithsonia

Brummies and commuters looking for a unique card or smart gift will know independent giftshop, Smithsonia. It’s in Piccadilly Arcade which sweeps down from New Street to Stephenson Street, delivering commuters into the big silver bubble of New Street Station. Many people don’t see the impressive painted ceiling in the arcade because they’ll be distracted by something in the window of Smithsonia.

Couple Mike and Verity Ferguson have been in business in Birmingham since 1979. The shop’s name comes from Verity’s surname, Smith.

Smithsonia sells cards, jewellery, ceramics, textiles and art. If you’re looking for a present for anyone, Smithsonia should be on your radar. Verity jokes that the only market they don’t cover is gifts for typical teenage boys!

Piccadilly Arcade has suffered the same drop in passing trade as the Great Western Arcade. Online sales for Smithsonia bring in nowhere near the revenue they take in the shop – their trade has always been from people passing by on their commute or lunchbreak.

Smithsonia would usually do most of their year’s trading in the run up to Christmas – but this year, Birmingham’s famous German market won’t take place. Without the market and without the commuters, Mike and Verity expect to make just a third of their usual sales at Christmas.

The Fergusons and other business owners in the arcade hope their landlord will be helpful. None of them – the businesses or the landlord – wants empty units in the arcade. The clothing chain Cotswold Outdoor occupies a unit at the New Street end of the arcade and this shop remains closed. Without commuters passing through, the arcade needs lively stores at the entrances help draw in shoppers. The store owners hope to negotiate a deal with their landlord that will be positive for everyone.

While the company’s accountant has been helpful, Mike and Verity’s attitude has been to carefully read the instructions from the Government and get on with it themselves. They furloughed their two staff and the pair now work six days a week, taking each day and each decision as it comes. Some suppliers are so convinced that small businesses will fail, they’re asking for payment upfront. The coronavirus outbreak has not just brought disruption – it could be disastrous for shops like Smithsonia.

Bull Ring Rag Market

In more successful years, Birmingham’s Rag Market was a joyful riot of colour, sounds and textures. It’s the place to come when you’re after fabric, wool or haberdashery. You’re also in luck if you’re looking for a vintage jacket, fancy dress outfit, or a boilersuit in bright neon orange.

Today, the produce is there but not the people. Some stalls stand empty or covered up, and just a handful of customers drift the aisles. The most popular stall, with a cluster of customers, was a trader doing discount fragrances.

Sarah runs a haberdashery stall. Between serving customers – mostly pensioners – she told me that the stallholders got a discretionary grant from the city council. With just a fraction of the previous footfall, traders don’t know how they’ll survive.

Across from Sarah’s stall is Alka’s hat stall, stacked high with all kinds of headgear from casual and cosy to smart and showy. Sales have dried up because customers aren’t buying hats for church, weddings or events. The stall now offers fabric masks. Alka’s assistant told me nothing else will sell.

The team at Alka’s, and the other market traders, are trying to stay positive. One trader told me it’s important to make yourself happy. But with a much-reduced footfall and no money coming in, traders will need more than just a positive attitude.

Bull Ring Indoor Market

Inside the Indoor Market, butchers and fishmongers look up expectantly as I walk past. Just a few Midlands pensioners are filling their shopping baskets.

Traders in this market technically have a ‘premises’ so they were eligible for the Government’s Small Business or Retail Grant. This was useful to tide over the traders while the market was closed but working in a market is a way of life – what the traders really need is customers.

I left the food stall traders to serve the few customers they had. Around the edge, many of the non-food stalls were empty or covered up, making the market seem semi-shut.

At Xpress Phones, owner Gohir was both managing the stall and minding his two young sons. His company has two units, one inside and one outside the market, and so it was eligible for two Government grants. Customers come to the stalls to buy or sell a second-hand mobile phone, or pick up phone accessories.

Today Gohir estimates the footfall in the market is less than 50% compared to last year. (Officially, the council say it’s 37% less.) With fewer passing shoppers and fewer city centre workers popping in to trade their old phone or buy a new case, the future’s looking more bleak than bright.

Traders pay rent to the city council so Gohir is hoping the traders’ association will be able to negotiate with the council for support. Traders understand the council needs to earn money but if market traders are forced to quit, then the council lose income too. Plus, fewer occupied units means the market looks empty so shoppers will stay away, leading to a snowball effect towards the decline of this historic market area.

Gohir is realistic. His dream right now is that someone will offer to buy his business – he’s already put it up for sale. Meanwhile, he’s investigating trading online. Maybe his sons could help? With no school during the summer break and more potential disruption to education in autumn, a digital project like this could create two mini Brummie entrepreneurs with real-world job skills they might need in future.

We exist to serve small businesses

Here at Tide, we can’t do anything to bring back thousands of shoppers to city centres. But we do make life easier for the 200,000+ small business owners who are members of Tide.

If you’re investigating how to adapt your small businesses post-Covid, you’ll also be reviewing your outgoings. If it’s been a few years since you opened your business bank account, it’s sensible to shop around to see if you can get a better deal. Did you know that the cost of a Tide business account starts from… free?

While it isn’t yet as quick as switching a personal account, moving your business account could save you hundreds of pounds a year. And with Tide, you can also do your invoicing, calculate and file your VAT return and more. All for FREE.

Have your say

How has the coronavirus crisis affected your company? If you’ve reopened, how is trade going? We’re keen to hear from you – get in touch with us on LinkedIn, Facebook or Twitter.

All photos by Suzanne Worthington © Tide, unless otherwise stated.