“Wrong place at the wrong time”: SMEs bear the brunt of London riots

Small- and medium-sized businesses have been hit hard by the violence and rioting in England, with stories continuing to emerge of SMEs having their stores burnt down, goods looted and shopfronts smashed.

With the rioting running for several days straight and spreading beyond London to Liverpool, Birmingham and now Manchester, the British Retail Consortium says the damage bill will amount to tens of millions of pounds and some SMEs will not recover.

“Many retailers were under quite a lot of pressure anyway, particularly some of the smaller independent ones who haven’t got big national resources to draw on, and undoubtedly in some cases it won’t be viable for them to start-up again,” Richard Dodd, head of media at the British Retail Consortium has told Reuters.

The Association of British Insurers has put the damage bill at tens of millions of pounds. According to Reuters, because the police are responsible for law and order, they are liable for property damage caused by rioting – meaning lower payouts overall for insurers, although businesses will still need to absorb losses from the inability to trade.

The small business website Smarta is attempting to get businesses in touch with each other to help with the cleanup.

One Australian living in London told SmartCompany this morning that the city – home to almost eight million people – was a war zone.

Among the sad cases, the family-run House of Reeves furniture store in Croydon, set up in 1867, has been burned to the ground.

Asked how he felt about those responsible, its fifth-generation owner Trevor Rees replied: “Sad. I’m just disappointed. It could have happened to anyone but we were just in the wrong place at the wrong time,” AAP reports.

“It has been through two World Wars, depressions; it has been through the lot. We are fortunate in that we have two stores and the fire crews managed to save the other one.”

“I don’t think we were targeted and I don’t think it was premeditated. I don’t know what the thought processes were for those that did this.”

Another Clapham business owner, Duncan Mundell of Party Superstore, said he had suffered more than £800,000 of damage after his store was burnt down, The Telegraph reports.

Also in Croydon, a solicitor whose office had been burned to the ground told the Financial Times he had been told by nearby children that he should be happy because he could now claim it on insurance.

One newsagent told the paper as he closed his shop early that it was not worth staying open. “If I get three or four muggers in… they can ruin me.”

Earlier in the week, police chiefs urged businesses to take “precautionary measures” including putting on security guards, while The Telegraph reports that Clapham residents formed a line to stop looters getting through and reports suggested members of north London’s Turkish community were armed with baseball bats in Stoke Newington.

Retailers such as JD Sports, Comet, Dixons, Tesco, Sainsbury have each reported damage, while pubs firm JD Wetherspoon has also reported its Great Harry pub in South London’s Woolwich had burnt down, Reuters reports.

Celebrities have also been hit by the looting, with a boutique owned by former Oasis singer Liam Gallagher in King Street reportedly targeted by looters.

The event comes less than a year before London is set to host the 2012 Olympics and while it was originally triggered by a police shooting on August 8 in south London’s Croydon, many have also attributed it to high unemployment, austerity measures and racial tensions.

Beyond the brand damage to London and the wider UK, there are local concerns the riots will hurt the pound’s position as a safer currency amid volatility on the currency market.

The use of social media has come under the spotlight during the riots, with calls for Blackberry’s secure-messaging service to be suspended to prevent communication between rioters. There have also been calls for greater police numbers and force.

British Prime Minister David Cameron has said the criminality will be “confronted and defeated.”