Fewer small businesses

98,000 businesses started in the first three months of this year. 100,000 closed down. If the trend continues for the rest of the year it will the first year it will the first time since 2000 that more businesses close than open. There are a number of ways to look at this. It is easy to get into the mindset that this is somehow doom and gloom and yet another sign of the credit crunch cutting a swathe through our prosperity. But I think it is better to think of it as a welcome return to some kind of normality. The credit crunch as not come out of the blue. It comes after a long period of whatever the opposite of a credit crunch is. A credit binge I suppose? The plain fact is that everyone has been borrowing too much. Homeowners have paid outrageous prices for their homes, with outrageous mortgages the necessary co-factor. Consumers have huge credit card balances to pay off. I think we are now entering a period when everything will be changing on the retail scene. Is this bad news for the independent shop? Not necessarily. Retailers are going to have to change quickly to adapt to the new situation. People will be much more careful spending money that they have earned rather than borrowed. And it will be much easier changing things round in a small shop than a huge chain.