The Secret Retailer: ‘The government is fiddling while Rome burns’

I wonder if it’s driven by the fact that we, as retailers, are growing weary of having little to no influence on government policy on anything substantive.

I am astonished that the government seems to believe normal cashflow-based businesses can somehow survive being shut for what could be four months out of five by the end of March.

Although Boris Johnson has suggested schools could reopen on March 8, no one sensible is looking for a guaranteed reopening date for retail and no one is looking for an infinite cash handout.  

“We need to know what we are planning for and we need to know now”

However, the type of decisions that my business, and many others, are now being forced to take in order to ensure some sort of survival into the spring are extremely far-reaching and permanently damaging.

We need to know what we are planning for and we need to know now. 

Why, in this context, is the government not being definitive about what support will be available if the lockdown continues beyond the end of March?

Rates relief, extensions to the furlough scheme or the landlord enforcement moratorium and a reboot of the guaranteed loan facilities – into some form of bridging loan, rather than normal debt, as many retailers’ debt capacity is limited – are all policies that spring to mind. 

And as for the fiasco over the ‘state aid’ rule – you couldn’t make it up. The government trumpeting £9,000 grants for every closed property sounded great, but the substance did not live up to the rhetoric.

For larger businesses like ours, the irony of the cap on what we can claim being limited by something that should no longer apply given our exit from the EU is bizarre.

It is equally puzzling that last year a whole arsenal of support was put in place for a lockdown that lasted two months. This time there is nothing. 

“I suspect that many non-food and clothing retailers might well become instantaneously bankrupt the day the landlord enforcement moratorium ends”

I have no idea what the government thinks is going to happen when the landlord enforcement moratorium comes to an end, but it will be a complete car crash. Every landlord owed money will instantly launch legal proceedings as no one will want to be last in the queue. 

I suspect that many non-food and clothing retailers might well become instantaneously bankrupt the day the moratorium ends. 

The fact that the moratorium ends soon is also discouraging landlords from entering agreements on rent deferrals this time round, as they would rather time-out on the moratorium and keep their options open. All of which is helpful for the legal profession, at least.

Some businesses have told their suppliers that they will not be open again until May. Others have a plan for mid-April; some for March. We are planning on the basis of May.  

For those retailers most impacted by the pandemic, none of us can wait for the chancellor to pronounce the budget in March – crucial business decisions are being made now.

Pre-Covid, we were a successful, cash-generative business. We have money in the bank today, but even with strong online trading, our resources will run dry if restrictions are not lifted by the end of March. 

The future livelihoods of people we employ are at stake. Communities that we once served may no longer have shops that, in ‘normal times’, were viable parts of our business. 

Worse still, we may have to go down the route of launching a CVA process, increasingly used by others when all other options are exhausted. These are decisions that no business leader wants to make.

The situation is very, very serious and, even in a best-case scenario, many businesses will be limping at best when we do reopen.

I find it difficult to focus on subjects like the enforcement of face masks when we all reopen – the main subject of a recent government call – when the real question is whether some of us will be able to survive to open at all.