The Jesmond Residents Association 50th anniversary series of talks came to an end last week on a hesitantly cheerful note.

The speaker, Ed Banks, one of two Local Economic Development Officers at Newcastle City Council, stressed that there was cause for optimism for small businesses in Jesmond, telling the small audience who had gathered in the library on a bleak winter night that businesses that are willing to “innovate” can beat the odds.

Owners of small and medium enterprises (SMEs) in Jesmond and across the country have had plenty of reasons to feel gloomy recently. In terms of local problems, the development of the new Sainsbury’s Local store is gathering speed, which some fear will put pressure on nearby small businesses.

Additionally, Central Bean’s closure, blamed on pressure from their neighbours Waitrose, is cause for concern. These negative developments have occurred against a backdrop of ever more unsettling warnings about the stability of the national economy.

Banks, who has worked in economic regeneration in the North East for the last decade, said that a major problem facing SME’s was that disposable income takes a huge hit in the years following a recession and takes a long time to recover (disposable income levels are growing but, even six years on from the financial crisis, progress has been sluggish). This is a major problem for small district economies like Jesmond’s because many outlets offer ‘non-essential services’ (i.e. the sort of services, like luxury goods and restaurants, that people scale back on when trying to moderate personal and household spending).

Retailers also have to come to terms with the reality that “the high street is changing”, largely due to online shopping and shifting demographics. However, Banks told the small audience that there was still cause for optimism and ways to thrive in this fluctuating environment. Developing a unique selling point, exploring export opportunities and moving operations online were among the options he proposed. One point in particular, however, seemed to apply to Jesmond: online marketing. Readers who use social media may be aware that Jesmond businesses have a relatively large online footprint.

Social media footprint of a sample of Jesmond-based businesses

Fat Hippo, who now have three outlets (one in the city centre) are runaway leaders of the businesses JesmondLocal surveyed, reaching nearly 20,000 followers on a daily basis, but you can see how even small, very new enterprises like Iglouu and OB Barber’s have been able to attract sizable audiences online, reaching customers they perhaps weren’t likely to otherwise.

During a question and answer session following his talk, Banks conceded that small businesses may never be able to match the purchasing power of supermarkets and simply don’t have the same freedom to slash prices. However, he added that the shift away from out-of-town megastores, which deter people from visiting the high street at all, to town-centre convenience stores at least means that there is an opportunity for SMEs to compete for residents’ custom. On a less optimistic note, when put to him that there could be an opportunity for Jesmond businesses to organise and lobby on behalf on shared causes he warned that, whilst useful, there is a limit to what these types of organisations can achieve. He said that it would have been unlikely, for example, that a local business group would have been able to influence Waitrose’s national policy to offer free beverages on behalf of Central Bean.

Banks painted quite a hopeful picture, without being oblivious to the travails facing business owners in today’s market, but with many economists predicting further stagnation – even downturn – in the national economy, it remains to be seen if this new crop of bright Jesmond SMEs can weather the storm.

Do you own a small business in Jesmond? Get in touch and tell us what you think the future holds for startups and SMEs in the area.