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High street businesses: be prepared for a second lockdown

It’s the worst possible news for high street businesses that paid a heavy price for enforced closure during the national lockdown earlier this year, but the facts are inescapable. Coronavirus cases are rising again and, in response, the government has put in place a series of new restrictions – from the “Rule of Six’ and localised lockdowns, to a 10pm curfew for many hospitality businesses and enforced closure in some areas.

That has, in turn, reversed the incipient recovery that had high street businesses across the UK breathing a collective sigh of relief.

The imposition of a 10pm curfew for pubs, bars, and restaurants for instance, has had a dramatic effect. On the 21 September, the day before the curfew was announced, takings were slightly higher than the same period in 2019, but less than a week later, bars, restaurants, and pubs, had suffered a 37% fall in sales income.1 Meanwhile, those businesses now told to close in some areas face further uncertainty.

High street shops have not emerged unscathed either. Easing of restrictions had seen footfall recover after an 80% decline in March, though custom was still 24% behind comparable figures from 2019. However, rising infections coupled with tougher restrictions have driven that recovery into reverse – by the end of September, footfall was down by 33% compared with a year earlier.2

Worse may follow, with the government refusing to rule out a further tightening of restrictions, and even a second full lockdown, if the rate of infection does not start to decline.3 

Clearly a second period of enforced closure, whether locally or nationwide would be devastating blow for high streets, with already struggling bars and restaurants likely to be amongst the hardest hit.4 All of which explains why both redoubling infection control efforts, and preparing for the worst, are so vital now.

So, what can high street businesses do to prepare for the worst?

First, those businesses already facing closure due to local restrictions must now take steps to protect premises during closure and look closely at government financial support designed to help protect jobs and businesses forced to close.

However, with the vast majority of high streets falling outside of Level 3 restrictions, it is vital that every business follows government COVID-19 Secure guidelines – which cover everything from hygiene regimes to social distancing – as well as sector specific guidelines including table service only for bars and restaurants, and face coverings for shop staff. Quite apart from avoiding fines of up to £4,000 for non-compliance, stringent measures to keep staff and customers safe will play a part in helping to avoid a second lockdown.3

But reviewing operations and planning ahead could also help high street businesses weather the storm if tighter local restrictions follow. Those steps could include:

  • Review inventory and stock processes: With the spring/summer 2021 buying window now open, taking a close look at stock levels and product ranges would be a wise move. Working with suppliers to shorten delivery timescales, as well as reducing product ranges, could help to cut costs and reduce exposure to unsold inventory if a second lockdown is imposed.5
  • Think carefully about staffing: Employing people is often the largest single cost facing high street businesses so, painful as it might be, thinking about the affordability of retaining staff during enforced closure, without the safety net of the furlough scheme,6 is an essential precaution.5
  • Stay in touch with landlords: The government has extended a ban on commercial property evictions over unpaid rent until the end of December 2020,9 but that is not a reason for complacency. Remember that post-Christmas is a peak period for business insolvencies, so maintaining good relations with landlords now could prove vital if and when that moratorium ends.10
  • Investigate online sales and takeaways: During the UK’s first lockdown, online sales boomed,8 while many bars and restaurants turned to takeaway and delivery services to help make ends meet.9 Of course, setting up a takeaway or delivery service for a bar or restaurant, or setting up to sell online during a lockdown may not be for every business, but investigating the possibility now will at least ensure businesses are prepared if the worst happens.

One thing is for certain; change is now the new normal. So keeping a close eye both on business performance and wider developments, planning ahead, and being ready to adapt quickly, could be vital to keeping your business afloat over the coming months.

Keep up to date with the Coronavirus

For our latest news and guidance on the Coronavirus epidemic, visit our resource centre which will be updated daily as the situation develops, so please check back often for the latest material.

 

Sources:

1. theguardian.com/pubs-bars-restaurants-covid-curfew-sales-plunge-uk 
2. theguardian.com/covid-second-wave-hits-recovery-in-uk-high-streets-data-suggests 
3. telegraph.co.uk/lockdown-second-wave-new-uk-rules-national-boris-johnson-update 
4. express.co.uk/Coronavirus-latest-update-second-lockdown-UK-pubs 
5. drapersonline.com/how-to-prepare-for-a-second-coronavirus-spike 
6. bbc.co.uk/news/business-54362373 
7. fitchratings.com/uk-extended-eviction-moratorium-adds-to-retailer-landlords-woes 
8. internetretailing.net/how-covid-19-is-expected-to-shape-the-biggest-boom-in-online-retailing-yet 
9. uk.finance.yahoo.com/kantar-supermarket-data-market-share-grocery-retail-uk

 

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