U.K. Shoppers Show Pent-Up Demand on Release From Lockdown
(Bloomberg) -- Consumers flocked to shopping streets across England on Monday as non-essential retailers reopened after almost 100 days of lockdown, along with pubs and restaurants with outdoor space.
Shoppers lined up outside retailers on London’s famous Oxford Street, including the luxury department store Selfridges and outlets of sneaker retailer JD Sports Fashion Plc. Businesses are hoping the pent-up demand following England’s third lockdown will translate into bumper sales.
Early data suggest Britons were eager to visit physical stores, even after growing used to the ease of e-commerce during the pandemic. The number of people at stores in England had more than tripled as of 10 a.m. Monday from the previous week, when only food and other essential businesses were open, according to Springboard.
“Today is a major step forward in our road map to freedom,” Prime Minister Boris Johnson said in a statement. “I’m sure it will be a huge relief to those business owners who have been closed for so long.”
It’s a critical time for Britain as the country eases out of lockdown while trying to avoid a new wave of Covid-19 already taking hold in continental Europe. A second summer of pandemic restrictions could devastate large parts of the economy, particularly the retail, hospitality and travel sectors, where the toll is already severe.
The pandemic has led to more than 127,000 deaths in the U.K. and contributed to the country’s worst economic downturn in three centuries.
“One of the awful things that is going to become quite quickly apparent is how many shops have failed to reopen today,” said James Daunt, chief executive officer of Waterstones bookstores. “Lockdown has had an absolutely disastrous impact, and on specialty retailers in particular.”
Michael Ward, managing director of Harrods department store, warned that the pandemic has dealt a “severe blow” to London. It could take at least “three to five years before we get back to 2019 levels,” he said in an interview with Bloomberg TV on Monday.
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“The response of households to the reopening will go a long way toward setting the pace of the recovery. A swift rebound is possible even if consumers sit on the 150 billion pound slush fund accumulated during the pandemic. Putting just a fraction of that cash to use would turbo charge the recovery.”
-- Dan Hanson, economist
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Johnson has come under pressure from MPs in his own party to accelerate the lifting of curbs, with virus cases, hospitalizations and deaths all sharply down and the vaccine program now reaching beyond the most vulnerable. Gyms also reopened Monday with limited services, and barber shops and hairdressers reopened for pre-booked appointments.
The next major easing of rules will happen from May 17, when indoor hospitality will resume. The government’s aim is to then remove the remaining restrictions starting June 21.
Johnson hasn’t indicated he is willing to deviate from his previously announced timeline for reopening. He urged the public to “behave responsibly” with the latest easing, and to continue to follow government advice on hand-washing, mask-wearing and social-distancing.
U.K. Vaccine Tracker: 39 Million Doses Administered
Close to 70,000 retail jobs have been lost in the past year, according to the British Retail Consortium, a trade body representing the industry, the U.K.’s largest private-sector employer. John Lewis Partnership Plc had already said it wouldn’t reopen eight of its 42 remaining department stores on Monday, putting 1,500 jobs at risk.
Retailers that are opening their doors again have spent millions of pounds on measures to promote safe shopping, from glass barriers at checkouts to more frequent cleaning. They have also worked with the government to address issues around the testing of staff, the use of fitting rooms and safe use of air-conditioning and ventilation.
Brands are also doing what they can to lure shoppers back to physical stores and welcome them. At an Ikea store Greenwich in southeast London, staff members applauded entering customers after the shop opened at 10 a.m., as Pharrell Williams’s “Happy” blared out over the sound system.
Harrods is planning pop-up boutiques and al fresco dining, according to Ward. Rival Selfridges is running an outdoor cycle studio next to the giant store and will offer in-store experiences such as florist workshops, children’s parties and private cinema screenings. Many retailers plan to take advantage of relaxed rules allowing them to stay open late.
Similarly, pub operators have invested about 285 million pounds ($390 million) in lease agreements and equipment to host outdoor events to comply with government’s guidance, according to the British Beer and Pub Association.
Drinkers will only be able to order once seated at an allocated table, although pints can now be served without last year’s “substantial meal” requirement. That policy sparked a debate across the country as to whether a scotch egg -- a baked or deep-fried snack sold at many pubs that don’t operate full kitchens -- met the criteria.
“It has been a difficult year for retail and hospitality, but the multiple lockdowns of 2020 have shown us that we can reopen safely and sustainably,” said Jace Tyrell, CEO of the New West End Co., which represents businesses in London’s shopping and entertainment district. He said the success of the U.K.’s vaccination program “has given us the boost we desperately need to save jobs and viable businesses.”
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