U.K. Retailers See $31 Billion Cost of Three Covid Lockdowns
(Bloomberg) -- Britain’s three pandemic lockdowns have cost retailers that have been ordered to close about 22 billion pounds ($31 billion) in lost sales, according to a trade group.
In a sign of the mounting toll Covid-19 is taking on one of the country’s biggest employment sectors, the British Retail Consortium says 2020 was the worst year on record, with in-store non-food sales declining by 24%, compared with 2019.
Foot traffic in stores was down more than 40% in 2020 as Covid-wary consumers avoided malls and town centers and turned to online shopping instead, the group said in a statement.
Underlining the extent of weakness, Ted Baker Plc said Thursday that its sales plunged by 47% in its final quarter as pandemic restrictions limited demand for party outfits over the Christmas season. Even when stores were open between lockdowns, many consumers stayed away, said the British fashion retailer.
The apparel chain, once of the country’s best-performing brands, said it now expects its business to be materially affected by store closures until May before a gradual recovery begins in the second half of the calendar year.
Ted Baker shares fell as much as 8.8% early Thursday in London.
Britain’s retailers have been among the hardest hit by the pandemic, as non-essential shops have been forced to close for weeks at a time during lockdowns while also investing in Covid safety measures to protect staff and customers when shops are open. Demand for online shopping has soared, stretching many retailers’ e-commerce capacity.
In January, Associated British Foods Plc, owner of budget clothing retailer Primark, said that if the latest lockdowns across Europe lasted until the end of February it could cost it more than 1 billion pounds in lost sales. The U.K. company said it had already lost 540 million pounds worth of sales due to autumn lockdowns.
While some retailers, such as supermarkets, have stayed open and enjoyed a sales surge, many are now fighting for survival.
The consortium said the government needs to use the upcoming budget to extend current relief on rents and business rates, a form of U.K. property tax, to keep stores in business. It also wants an easier process for retailers to secure lockdown grants.
BRC Chief Executive Officer Helen Dickinson said these short-term actions will “relieve struggling businesses of bills they cannot currently pay” and allow them to survive through prolonged closures and job losses.
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