Ordered to die: why 250 thousand small enterprises were closed in Russia

Yelena Ivanova, Natalia Seibil

Alexander Kalinin, President of Opora Rossii, calls the companies' withdrawal from the market this year “record”. The record is sad - not only entrepreneurs, but all their employees are left without a livelihood. Aleksey Nikishov, about whom Novye Izvestia wrote in April this year, fortunately does not belong to the “record holders”, at least not yet. Before quarantine, I was spinning as best I could - a sports club, other businesses, my wife has several nail salons in the south-east of Moscow. The result of this year is sobering: for the sports club in Izmailovo, the turnover fell by 70%, in the manicure business in Veshnyaki and Kuzminki - 45%.

- I had charity programs in the club. People with disabilities could come for free, and children - for 500 rubles a month. Disabled people still walk because they have absolutely nothing to do. Children walk less. The losses appeared because people began to walk physically less. In addition, a rule was introduced that 30% of people should go to work remotely. We hang out workers, one week, another week. People are afraid and come much less than before, - says Alexey Nikishov.

In public catering, the decline in turnover is even greater. During the quarantine, Aleksey's cafe in Golyanovo delivered food to your home through Yandex delivery. The turnover was 5 thousand rubles a day. This just covered the salaries of the cooks, all the profits were taken by the aggregator. For the first wave, Nikishov was lucky - he agreed with the owner of the premises and paid only 20% of the rent. If the owner meets halfway, then the business will be able to save, he says. Another question is how to retain staff. In the spring it turned out, only one hour was gone. State aid worked in only one way - we received subsidies for the salaries of employees - 12,300 rubles for each:

- These subsidies can be compared to drugs, because they were given to a drug addict, he injected, and then he feels good for a while. But then it was better - we paid the salary, but then we had to pay taxes on this salary. At the same time, you confirm that you will not fire these people for a year. And then mathematics begins. If you need to keep employees for a year, you will pay the same taxes as you received from the state. We return the subsidy to the state with taxes.

Before the pandemic, businesses made it possible to live a normal life, pay teachers for children, pay a mortgage. Now there is no income at all, and Alexey went to work as a manager.

- I still have to earn extra money. I have a business, but I have no money, I have to earn money, can you imagine? - he does not believe himself.

As a result, Nikishov pays wages and utility bills. We are not talking about any income now. Even if there is zero income during the year, he does not want to close businesses. The entrepreneur also stopped paying taxes. He says that when the money comes in, he will pay everything: taxes, fines, and penalties. In the meantime, 400 thousand "tax" rubles "hang" on the sports club. As they say - God will not give out, the pig will not eat.

Analysts at the Sberbank Center for Macroeconomic Research warn that the debt of all Russian enterprises is growing rapidly. The income received is not even enough to service existing debts. Thus, companies turn into a kind of pyramid scheme. Bankers say that in 116 sectors of the non-resource economy out of 192, the debt burden rose sharply, and in 29 sectors it exceeded the critical level. 40% of enterprises in the service and transport sectors and three quarters of companies in the hotel business, catering and healthcare cannot even pay the interest on loans.

“This is most likely a bottom-up estimate, since the data does not take into account small businesses, which are likely to be hit particularly hard,” Sberbank said in its review.

How many small businesses are in a similar position, no one can say. The consequences of the coronavirus were only partially reflected in the statistics: the register of the Federal Tax Service recorded the closure of 1,116,000 small companies and the creation of 870,000 new ones.

- The record departure of companies from the market is due to the fact that the global economic crisis was superimposed on the epidemiological crisis that small entrepreneurs are facing today. The worst hit were the service sector, hotel and restaurant business and non-food retail. Net closings of companies amounted to 247-250 thousand firms. Last year there were three times less of them - 80 thousand companies were liquidated in a year. So the trend is obvious: the business is forced to close, - says the president of Opora Rossii, Alexander Kalinin.

The acquaintances of the entrepreneur Alexei Nikishov, who kept small shops, went bankrupt for a long time. Survived are those who sell their own products, for example, the owners of the sausage shop. Only the network giants have benefited from the pandemic, which, as before the first wave, are only increasing their turnover and profits. People save a lot, but they have to buy groceries anyway.

- I see in my neighbors - they just cry. Some sell cheeses, others - milk, others - sausage. These are small shops with an area of no more than 10 square meters. It’s very sad for them. They will never be able to compete with networkers in their lives, - says Alexey Nikishov.

There were no mass closures in trade, Vladlen Maksimov, vice president of NP "Opora", does not agree with the entrepreneur, although he admits that the situation for small stores has deteriorated. The Ministry of Industry and Trade holds a weekly meeting on the pandemic. In food trade, the revenue of large chains increased by 10%, for regional chains it remained at the level before the pandemic, and small stores lost 10%.

- Of course, small business is experiencing a more difficult pandemic. It has a smaller airbag, more expensive labor per unit area, and higher purchase prices. When people save on everything, they are ready to drive the extra twenty kilometers to the hypermarket and buy everything there cheaper", - says Vladlen Maksimov.

Lease deferrals can help small companies. But in Russia there are very few premises on the first floors of buildings, mostly rented in shopping centers, but there the rent is high, especially in large cities, and no one is going to reduce it. The government tried to solve the problem, even passed a new law, but it did not satisfy either small and medium-sized enterprises or shopping centers. The courts are still going on, the centers demand 100% payment. Vladlen Maksimov cannot contain his indignation:

- What kind of "full volume" can we talk about when people were not working? In turn, the state was not ready to settle this issue in such a way as to spend serious money on it. This is a huge problem. If it repeats itself, then everyone understands that this time no one will wait and there will be more closures.

Hypermarkets are increasing their market presence. “In the second quarter alone, X5 Retail Group, due to the optimization of business processes, showed an increase in comparable sales by 4.7%, while opening 367 new retail outlets, reconstructing 116 stores, and developing several of its own online stores,” such figures are given in his analysis of food retail, professor of the basic department of trade policy of the PRUE. G.V. Plekhanov Vyacheslav Cheglov.

The processes of trade infrastructure consolidation and the displacement of small companies in the food market have become irreversible, the analyst says.

Fighting the goliath is pointless, entrepreneurs say. Never a small store will be able to offer a price for the same Coca-Cola below Auchan or Metro. The support of the authorities is also not widespread - where the authorities do not create problems for small business, for example, with a license for alcohol or tobacco, there it is.

- There is the experience of France, when small enterprises united in cooperatives and purchased products jointly at large wholesale prices. But only the French authorities imposed restrictions on the opening of large stores in cities where there are many small shops and few residents. In Russia "Pyaterochka" is on every corner. This is a question for the Antimonopoly Committee, says Alexey Nikishov.

There are also marketplaces on the Internet - Sberbank, Ozone, Wildberries, whose turnover has doubled over the year, but so far the little ones have no confidence in such cooperation. The point is, they say, everything is fine today, but tomorrow everything will be closed. Analysts also admit that there is a certain legal vacuum in this way of doing business. There are three options left - to switch to local products, go under a franchise or close. Local products are more expensive than those produced by large companies. A franchise involves strict adherence to the rules and payments to the franchisor, which is associated with additional costs. This type of business does not provide for flexibility. In the context of the ongoing pandemic, any additional ruble in the cost price brings the entrepreneur closer to the third option.

Vladlen Maksimov reminds that the pandemic is not over:

- We must talk about the next problem - the lockdown was two months, many will not survive the second. A lot of public catering was closed. It has much more losses than trading. You can even walk through the shopping centers and see how many closed objects there are. But this is due to the fact that people refuse to eat more expensive food outside the home than to buy food. If the situation at the beginning of the year does not repeat itself, one can hope that small businesses will have a chance to survive.

For small businesses, the turbulence zone began in March and continues to this day. The entrepreneurs did not notice any respite. Everyone is saved as best he can.