Retailers have warned that the reopening of non-essential stores in England from mid-June will not end the sector’s woes as they gear up to welcome shoppers back.
Prime minister Boris Johnson on Monday gave the go-ahead for a staggered return to business on Monday with outdoor markets and car dealerships opening next week, while high street retailers are set to do so from June 15 as long as they comply with coronavirus safeguarding guidance.
The damage caused to the sector was laid bare by the British Retail Consortium which on Tuesday estimated it had cost non-food retailers £1.8bn in lost sales. The trade body predicted many of its members would “still be in a fight for survival” once the lockdown ends.
The sector was already struggling before the crisis with more and more shoppers increasingly switching to online purchases. This trend accelerated during the lockdown as online shopping became the only way to buy most goods.
As a result industry leaders continue to press government ministers for help for the struggling high street. Helen Dickinson, chief executive of the BRC, said ministers “must act to ensure that retail rents take account of the ongoing crisis in the industry”.
Her comments were echoed by Doug Putman, the owner of entertainment chain HMV. “If landlords can force retailers to pay rent for those three months when they were not able to open then you are going to see a tsunami of bankruptcies,” he warned.
Most executives are confident they can cope with the updated government guidance on how to open safely as it drew heavily on input from the industry.
“There is nothing in there that carries any problems for us,” said James Daunt, chief executive of bookstore chain Waterstones.
The government has discouraged the idea of personal protective equipment for store staff but suggested that items that have been returned or “extensively handled” should be isolated for 72 hours or cleaned before going back on display.
Mr Daunt said Waterstones will ask customers to put books they have handled on trolleys for removal and isolation. Mr Putman said he was considering replicating measures used in his US and Canadian stores where customers are asked sanitise their hands on entering the shop and again if they want to handle vinyl, CDs or DVDs.
Fashion retailers say they will reduce handling of items by closing fitting rooms. “That has been the approach we have taken in other countries,” said the chief executive of one chain.
Like their retail counterparts, motor dealers have had to redesign their premises to incorporate social distancing measures such as perspex screens, one-way arrows on the floors and temperature checks for employees.
Robert Forrester, chief executive of car dealer group Vertu, said forecourts were “very well prepared” but cautioned that the industry still needs the network of used car auction houses to reopen, in order to sell on part-exchanged vehicles.
“We sold 308 part exchanges online in May, normally we’d sell 45,000 a year,” he said.
Another issue many are grappling with is that distancing rules require dealers to offer unaccompanied test drives. “Clearly we take their existing keys from them, but it’s always a risk,” he said.
Marshall Motor Group, which owns 132 sites, spent close to £1m preparing its showrooms for customers. “We take these things very seriously,” said chief executive Daksh Gupta, adding that when the company opened its service centers last Monday it received 5,000 bookings within the first 48 hours.
Any recovery in retail is expected to be fitful. “It’s not going to be a bounce back to where we were,” said Mr Putman. But he insisted that people “were itching to get back out” after being locked down for so long.
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A common theme in other European countries where shops have already reopened is that customer numbers have been down, but shoppers have spent more. “We do expect shopper behaviour will change,” said Mr Daunt. “There will be less lingering, browsing and passing the time of day. People are being much more focused”.
In Germany, where smaller stores began opening earlier in May, sales have started to recover. According to data from Textilwirtschaft, a trade paper, clothing sales were down 44 per cent in the week to May 4 but 24 per cent lower in the week to May 16.
Shops that have reopened in the UK, such as large out-of-town DIY stores and garden centres, have also seen strong initial demand.
Shopper numbers on the late May bank holiday Monday were 49 per cent higher than on Easter Monday, although they are still 70 per cent down on last year, according to Springboard, a consultancy.
“There is clearly a lot of pent-up demand,” said Diane Wehrle, insights director at Springboard. “I expect an immediate surge in footfall once shops reopen, although that may wane a bit”.
But Ms Wehrle said it was likely that some of the recent increase in online shopping — which went from 20 per cent of non-food sales to 30 per cent during the lockdown — may become permanent.
“Once people have tried something new and found they like it, they may opt to do more of it,” she said, adding: “But they want to get out and see other people. Even if you can’t have the same experience you had before, it’s better than what you’ve got now.”