By David Lonsdale
Hundreds of shops across west central Scotland are looking forward to getting back to trading today, after three weeks of forced closure as part of local lockdown restrictions.
Some 45 per cent of so-called non-essential stores in Scotland have been affected by the local lockdowns, and these stores have missed out on revenues of £12 million each day.
While the past three weeks have been frustrating, reopening does at least provide a chance to rescue some of the vital festive trading period, of which there are only 14 days left. That’s important because this is a critical time of year for many shopkeepers, especially those high street shops closed in recent weeks. One in every eight pounds of annual retail spending is traditionally spent during December. This income helps tide many retailers over the leaner winter months.
The First Minister’s decision to permit shops in the former local lockdown areas to effectively open a day earlier than planned is also sensible from a Covid perspective. It should help spread out shopper numbers over the coming weekend and make for a safer shopping experience for customers and staff.
The Scottish Retail Consortium is urging the public to play their part in creating a safe and enjoyable retail environment. Shoppers are asked to follow some simple steps – queue considerately, wear a face covering, adhere to all necessary hygiene measures, and be respectful to store staff. Also, don’t leave Christmas shopping until the last minute.
The reopening, coupled with the arrival of the new vaccines, is hugely encouraging. Hopefully too the era of on-off lockdowns is finally behind us.
However, it will be an undoubted struggle for retailers to make up for the lost revenue following the period of forced closure. These stores were shuttered for 14 weeks back in the spring and have yet to fully recover. Even now shopper footfall is down by more than one-third, shop vacancies are at a five-year high, and non-food stores are trading at 80% of the level of last year.
The coming months will remain challenging despite the vaccine. The economy is in recession, any trade deal with the European Union will still mean extra customs and other paperwork, and the UK’s unilateral abolition of tax-free shopping for international visitors will hold back growth.
This is why the SRC has put forward a recovery plan for retail.
Firstly, shops need to be kept open, regardless of any further lockdowns that may be required in the new year. Scottish retailers have invested £45m in Covid mitigations, and SAGE and its Welsh equivalent have both said the risk of virus transmission in stores is low.
Secondly, early clarity is needed on business rates reliefs for the coming year. With retailers’ revenues continuing to fall short, and with shops unable to trade at capacity because of physical distancing, April’s abrupt "reverse cliff edge" – which is set to see a 100% reinstatement of business rates – presents a massive challenge. Revenues and costs continue to be out of kilter and returning to a business rate poundage at a 21-year high is simply unsustainable for many stores.
Thirdly, action will be needed early in the new year to stimulate consumer spending and economic activity. We’ve suggested ministers consider introducing a high street voucher scheme, as is planned for Northern Ireland. It could help get the retail and hospitality sectors moving, trigger additional spending over and above the value of the voucher, and create an even larger economic multiplier. A much-needed economic shot in the arm just as the rest of us are receiving our own vaccine injections.
David Lonsdale is director of the Scottish Retail Consortium
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