20,000 stores are already expected to fail this year – and a second major lockdown would claim a further 5,000 shops, warns the home delivery expert ParcelHero. Thousands more stores are also set to shutter forever when special retail rent and rate protections end next year.
Coronavirus cases rose by a quarter on Wednesday, causing retailers to pray that the Government’s new ‘lockdown-lite’ measures, such as shutting pubs at ten and halting the return to the office, will work. Otherwise, the home delivery expert ParcelHero fears that a second ‘full-fat’ lockdown will result in the closure of many more retailers. So far, the Government has resisted calls for a less punitive ‘circuit breaker’ lockdown, but this may only be temporary.
ParcelHero’s Head of Consumer Research, David Jinks MILT, cautions: ‘Thousands of retailers have escaped liquidation by the narrowest of margins during the pandemic and a second lockdown could spell the end for a further 5,000 stores.
‘Prime Minister Boris Johnson’s message on Tuesday that “we reserve the right to deploy greater fire power, with significantly greater restrictions” has put retailers on notice that a national lockdown could be imposed if current measures don’t succeed.
‘20,000 stores are already expected to fall into administration by the end of the year and many more local shops are on life support. Tripping the circuit breaker will shut many of these down permanently.
‘Many analysts are expecting a second lockdown in England to coincide with school half-term in October, to limit its impact on children’s education. If the Government trips the circuit breaker for a two-week lockdown that includes pubs, restaurants, hairdressers and non-essential stores, their lights may go out permanently, even after power has been restored.
‘Following the first lockdown, 40% of all department stores and over 25% of all High Street clothing stores made absolutely no sales between 23 March and 15 June. It’s impossible to see how small, indie High Street stores that don’t have significant online sales capacity can survive a second, two-week shutdown. Online sales have rocketed over 50% this year but there are still many much-loved local stores that have not seriously increased their online presence.
‘As we move towards the end of the year and into 2021, prospects continue to look bleak. A commercial rates ‘holiday’ and a freeze on landlords taking businesses to court for non-payment of rent have acted as life supports for many small retailers that are struggling for their lives.
‘According to the current timetable, both these measures will have ended by next spring. When the bills and court orders come rolling in, a new wave of closures is inevitable.
‘We believe indie retailers do still have a chance of surviving the pandemic and prospering again, but that is only if they source home delivery services quickly and develop an integrated in-store and online sales strategy.’