11th of March 2020 was an important day in the UK as new chancellor Rishi Sunak delivered his first budget post-Brexit.
Whilst there was a heavy emphasis to address the Coronavirus crisis it was reassuring to see the Government was aware of the impact on small businesses this crisis has bought and more crucially, announced measures on how it can support SMEs which make up the lifeblood of the UK economy. Most startups, like MarketOrders fall under this category so here we look at how the Budget will affect our customers and industry and how best to prepare for the changes.
The Chancellor did not shy away from the reality of the situation we find ourselves in saying:
“There is likely to be a temporary disruption and “challenging times” to our economy. For a period, it’s going to be tough, ‘’ said chancellor Rishi Sunak.
The consumption of gold jewellery during these challenging times may be impacted with fewer visitors to high street jewellers as people opt to stay at home or self-isolate.
The reassuring news is that the UK government has put in place various measures to help with this difficult and hopefully temporary situation.
With a £30bn fiscal stimulus to support British people, the new 2020 budget should help British jobs and British businesses to face the virus.
Here are some of the points that are addressed with this new 2020 budget and the impact on our industry:
Business Rate Discounts for Small businesses with a rateable value below £51,000
With countries going into lockdown, the biggest concern is for SMEs and how they will survive if there is no footfall or visitors to their stores. For jewellery retailers who already have limited online presence, their physical stores are a key way to generate sales and revenues and they are heavily reliant on keeping their stores open. But there are no customers then overhead costs will continue to be difficult to pay for. Business discounts will provide some relief for these retailers
Business interruption loans for small businesses
SMEs could apply for loans to help them cover the next few months of uncertainty especially if the country goes into lockdown or more people start to self-isolate which will cause ghost-like high streets and empty shopping malls.
Bank of England announced an emergency cut in interest rates
So far, the high duty of 12.5 percent on gold coupled with the goods and services tax has made buying jewellery very costly, thus affecting consumer demand. But things might change as gold is seen as a safe haven asset in troubled times. as we see rates cut this may encourage savers to put their cash into assets typically seen as safe options in times of uncertainly.
We may actually see purchases of gold jewellery rise in this instance as a result as gold is typically seen as a reliable and safe store of value that can be liquidated with ease.
Some jewellers believe “this could see gold jewellery, in particular, emerge as a favourable investment option in 2020”, says Shreyansh Kapoor, Vice-President, Kashi Jewellers.
Employment allowance increase for small businesses
Most SMEs have limited cashflow so help with sick pay and employee leave will be a huge source of assistance to smaller enterprises who may not be able to fund employees to self-isolate if needed.
Organisers for the Istanbul Jewellery Show have confirmed that the event will be postponed amid the recent coronavirus outbreak. The event, which was due to take place later this month, is now scheduled to take place between 18-21 June 2020.
Small Business looking at their business expenditures and at getting more creative in their product order might be struggling with stock, delivery, and inventory management.
This is where MarketOrders platform could come handy by helping these jewellery retailers having an online presence and by reducing unnecessary stock of gold jewellery.
In times of uncertainty, MarketOrders could help them make smarter purchase decisions and help their business grow without typically tying up too much unnecessary capital in holding products and inventory they may struggle to sell.