With Boris Johnson putting the country in lockdown, experts warn that thousands of shops closed by the outbreak will never reopen as they were already under intense pressure before the outbreak from weak consumer demand, high business rates and the rapid growth of online shopping.
In its “Coronavirus: Lost Lives, Lost Stores and Lost Jobs” report the Centre for Retail Research, which has been forecasting retail trends over the past two decades, forecast that, by the end of the year, a total of 20,620 retail stores will have pulled down their shutters for the final time, up by 4,547 on 2019.
Professor Joshua Bamfield, Director at the Centre for Retail Research, explains: “We expect large retail businesses to now be looking at exactly how many stores they expect to operate in 2021 and beyond in order to trade successfully moving forward. They will now make plans to achieve those objectives.”
The report does expect a moderate ‘V’ type shape of recovery once stringent lockdown measures are lifted with a possible “splurge of cash by late summer”.
Job losses could rise to 235,714 up by 92,576 compared with 2019, in part, because of the rise in store closures but also as retailers cut their overheads and staffing ratios to reduce costs even further although Professor Bamfield says that the Government’s business job retention and interruption schemes coupled with the one years rates holiday for retailers will have limited significantly stores closures and job losses.
The report adds that 2020 may well be the best year for supermarkets and grocers since 2011, with consumers filling their pantries, freezers, fridges and wine racks. While Supermarkets are hiring more staff – up to 45,000 – to cope with increased demand, the majority are not expected to become permanent.
The retail sector is a major part of the UK economy with sales of £384 billion last year employing more than 2.9 million people directly with a further 500.000 workers in distribution and other retail services.