Any extension to the four-week English lockdown would be “catastrophic” for struggling retailers who risk losing billions of pounds in Christmas sales, the industry’s trade body has warned.
About 363,000 specialist shops will remain shuttered in England from Thursday as new government restrictions kick in. The British Retail Consortium (BRC) said the warning that the public should only buy essentials would mean overall shopper numbers would plummet. The impact on sales could potentially trigger further store closures and job losses, it said.
Helen Dickinson, the BRC chief executive, said switching to online sales and click-and-collect services would not enable “closed retailers to make up for lost ground. Any extension to the lockdown beyond 3 December would be catastrophic … so we urge the government to commit to allowing them to reopen from this date”.
The warning came amid a further bad news from the high street. John Lewis said it was cutting 1,500 head office jobs while Marks & Spencer posted its firstever loss after clothing sales dwindled during the first coronavirus lockdown.
The new lockdown in England comes at a critical time of year for the retail industry. Shoppers usually spend about £50bn on goods other than food in the weeks leading up to Christmas as they buy gifts and decorate their homes.
During the spring lockdown, the closure of non-essential stores meant the high street missed out on £1.6bn of sales a week. This time the consultancy Retail Economics is predicting a £6.8bn hit over the four-week period, with a chunk of trade expected to shift online, boosting the fortunes of web specialists such as Amazon but hitting independent stores.
Nicholas Found at the economics consultancy said fashion retailers in particular would be hard hit as they were already suffering because demand for outfits this Christmas had been affected by cancelled parties and limited social interaction. The tilt online would also put huge pressure on websites, warehouses and delivery networks, which were not prepared for such a seismic shift, he added.
“This couldn’t have come at a worse time for retailers,” said Found. “Lockdown measures have ensured it will be a digital Christmas … but [online] capacity will be stretched to the limit as a new wave of online shoppers purchase gifts online that they previously would only have ever considered buying in-store.”
Even before the new lockdown in England, UK shopper numbers had not fully recovered to pre-pandemic levels. Footfall in October was down by a third on the same month last year, according to the BRC-ShopperTrak monitor. High streets were the worst hit location, with footfall down by nearly 40%.
Andy Sumpter, of ShopperTrak, said local lockdowns coupled with rising infection rates had halted the nascent recovery in consumer confidence even before the new England-wide restrictions were announced. News of the second lockdown had led to a short-lived surge in shopper numbers but they were now expected to drop sharply.
In the first lockdown, Sumpter said footfall fell by as much as 85%, adding that he expected to see the same pattern this month, with retailers now facing the “prospect of a bleak, rather than a Black Friday”.
