UK government urged to support retail as omicron bites
After a period of recovery, the omicron covid variant is taking its toll in UK high streets. Last week footfall in London’s West End was down by 7% on the previous week and was nearly a third less than pre-pandemic figures.
“With rising Covid cases dampening consumer confidence and a planned Tube strike looming on Saturday, we’re anticipating a muted final weekend of Christmas trading at a time when West End businesses should be enjoying a much needed boost,” said Jace Tyrrell, CEO of New West End Company, the organisation that represents 600 brands, restaurants and businesses in the West End.
Tyrrell said that the UK Government should act quickly to provide temporary financial support to leisure businesses across the UK, “otherwise we run the risk of further viable businesses closing their doors in the coming months”.
“These businesses have made significant investments into their Christmas plans, and the Treasury must offer support to mitigate cash flow loss at this crucial time to ensure that businesses can bounce back strongly in 2022,” Tyrrell added.
The reduction in footfall indicates the speed with which retail fortunes have changed following the emergence of omicron.
Online sales apparently falter
Figures from the UK government’s Office for National Statistics show that in November there was a 10.8% increase in the value of retail sales against November 2020 while online sales faltered with a -12.2% reduction. The value of retail sales also grew 2.3% over the previous month, October 2021.
“It’s likely that online sales, which took 26.9% of the overall retail market in November, will rise significantly again in December. Shoppers will be increasingly wary of crowded town centres in a bid to avoid omicron and having to self-isolate in the run-up to Christmas. The High Street’s loss will be online’s gain, so we expect a far stronger e-commerce performance in December,” said online delivery specialist ParcelHero’s head of consumer research, David Jinks.
However, the reduction could be creating a false impression. “On the face of it, online sales took a bit of a pasting in November when compared to November 2020. However, last November we were in lockdown, with all non-essential stores closed, so we would expect a significant year-on-year fall,” he added.
The UK public is currently heeding government advice to rein back plans to go out and celebrate Christmas to limit the spread of the virus and restaurants have lost bookings in what has traditionally been the busiest time of the year.
Colliers has added to calls for the Government to step in to provide financial support for the sector, which which was still recovering from previous Covid-19 disruption.
Government announcements damage visitor-based businesses
Colliers head of business rates John Webber said, “the Government, through its announcements, has damaged businesses in cities throughout the country who rely on visitors – this includes not only restaurants, bars and retail but also serviced offices.”
He added, “Although we are not yet in an official Lockdown such as we saw at the beginning of the year, we might as well be for the impact the Government’s public health messaging is having on public behaviour.
“With calls to work from home as much as possible and to reduce socialising yet again, the retail and hospitality industry is losing custom at a rate of knots, costing billions of pounds. This should surely be accompanied by some sector specific financial support from the Treasury.”
Previously, businesses in the sector received subsidies via a furlough scheme as well as 100% business rates relief on the properties they occupied. There were also substantial government grants for businesses. However, the furlough scheme has ended and rates relief is capped at a two-thirds discount.
“The Chancellor needs to come out of the shadows and announce some key reliefs and he needs to do it now,” Webber said.