A nightmare before Christmas
By David Lonsdale, director, Scottish Retail Consortium
This article was first published in the Scottish Daily Mail on the 18th of November
THE decision from the First Minister and her Cabinet to put 11 council areas and much of west central Scotland in local lockdowns and to forcibly close thousands of stores from 6pm on Friday – with just three days notice - will flummox retailers who have jumped over every hoop asked of them.
Not only is it deeply frustrating, it is absolutely the worst time of the year for the stores affected.
Scotland’s retailers fully support the drive to reduce coronavirus transmissions and to get on top of the current public health situation.
The industry has more than played its part. Retailers have taken every reasonable step available to stop the spread of coronavirus. So far Scotland’s shopkeepers have invested over £40 million in physical distancing and hygiene measures, including Plexiglas screens at tills, barriers between till points, floor markings and signage, traffic-light systems, deep cleans and hand-sanitizer.
Indeed, we reckon retailers have put in place over 20 different mitigations to keep customers and staff safe. These efforts drew upon the work we did with trade union Usdaw and the experience gleaned by pharmacies, supermarkets and other so-called essential retailers during the early part of the crisis. And that’s before spending on staff training on the plethora of new coronavirus regulations over the past few months, or the ramping up of online and logistics and distribution capabilities since the Spring.
On top of that, Scottish shops faced the longest lockdown earlier this year. Large swathes of retail were shuttered for four months in the Spring and early Summer – longer than other parts of the UK – in order to aid the national fight against the pandemic. No one can credibly argue retail hasn’t done its bit.
Evidence from the UK and Welsh governments’ own public health advisers, SAGE and the Technical Advisory Group, explicitly says that the closure of non-essential shops will have only a “very minimal impact” on reducing the spread of the virus. That is because of: the short duration people are physically in shops, more so during the pandemic; the ability in such settings to physically distance; and because of the widespread use of face coverings; let alone the investment in safety measures.
Retail has demonstrated that it can operate safely in the current environment. It was notable that there was no spike in infections following the lifting of lockdown on non-essential shops at the end of June. As such, shops remain a safe space for customers and staff. This is why we urged Scottish Ministers to adopt the approach taken in Northern Ireland, whereby all shops got to remain open and trading during their recent coronavirus circuit breaker.
Unfortunately, the more draconian approach Scottish Ministers are pursuing carries very significant potential economic harms.
Scottish stores lost £2.5 billion of retail sales over the first eight months of the pandemic and have yet to claw their way back to pre-crisis levels. Shopper footfall is down by a third and shop vacancies are at a 5-year high. Non-food stores are currently trading with revenues a fifth below where they were this time last year. The lead up to Christmas is the key trading period of the year for these stores, with November and December traditionally accounting for a fifth of annual retail spend. SRC estimates that the closure of shops will deprive them of £90 million a week in revenue, money that would normally tide them over the lean months of winter. This could be acute as we are in the midst of a recession, and those high streets which were already struggling are most at risk.
The longer local lockdowns continue the harder it will be for some shops to re-open. The blunt reality is that the offer of grant support or furlough money won’t make up those lost sales, nor cover the rents, apprenticeship levy and other bills that still need to be paid, let alone the re-instatement of 100% business rates from April.
The government’s closure decision has implications too for the earnings of retail workers and those in other consumer-facing sectors, as well as for the vitality of our retail destinations, and for suppliers.
The local lockdowns are to last three weeks, but could continue after that depending on public health indicators. This makes it incredibly difficult for retailers to plan ahead, to sort out staffing levels and shifts, or sort out with suppliers what stock they need and when.
Many Scottish shops and high streets face a bitter winter following this announcement on local lockdowns and store closures. It is a nightmare before Christmas and genuinely make or break time for some.