The Derry trade lobby says the anxiety and concerns around the new variant have led to a steep decline in hospitality bookings and footfall in shops.
Existing restaurant and bar reservations have been cancelled as the public have been urged to 'prioritise' social events that 'matter to them' over the Christmas period, its Chief Executive Paul Clancy said.
Mr. Clancy said the fall in trade, at traditionally the busiest time of year for many businesses, is deeply concerning and will have a significant impact on already hard-hit small business owners.
He added that the Executive must continue to lobby the Treasury to put in place a comprehensive financial package which brings businesses back from the brink and recognises the severity of their trading conditions right now.
“The heightened concerns and anxieties around the Omicron variant, driven by mixed messaging and briefings in the media from medical advisors and politicians, are now actively harming businesses.
"While we are conscious of the need to do everything in our power to quash the expected Omicron spike of infections, this cannot and must not come at the detriment to our already-suffering hospitality and retail businesses. Our shops, pubs, restaurants, and hotels cannot be allowed to become the scapegoat.
“Now is the time for significant and substantial financial support for our businesses across the North West and Northern Ireland. While we understand that devolved administrations across the UK like Stormont are limited in what finances they can provide, and that Finance Minister Conor Murphy has called on the Treasury to reinstate substantial financial supports, we are urging our Executive Ministers, as a united collective, to strongly lobby the UK Government and the Treasury to put in place a proper financial package which supports our businesses," said Mr. Clancy.
Hundreds of local businesses are 'extremely concerned right now' he added.
"Uncertainty and a lack of clarity, mixed with public fear over the new variant, is driving a serious dip in trade. Christmas is a vital period for all businesses. It’s no longer sustainable for the government to ignore the plight of the economy. Support must be provided as soon as possible.
“We would again urge the public to continue supporting local and spending local this Christmas, as well as following all existing Covid protocols including mask wearing, hand washing, and getting your Covid jabs. Backing locally owned, small businesses is more important than ever as they struggle with uncertainty and dwindling trade," he declared.