Peter Williams: ‘To fully restart retail we need a return to pre-Covid behaviour’

We can all make educated guesses, but I cannot remember a time when we have been faced with such uncertainty as when we – hopefully – re-emerge from lockdown on a permanent basis over the next few months.

‘Non-essential’ retail stores have reopened. There may well be some initial euphoria – just look at the advance bookings for restaurants – but there is a great danger in interpreting this period of trading as a trend in either the longer or even the medium term. 

Putting aside the disruption created by Covid, the macroeconomic situation isn’t great. Economic growth was difficult before the pandemic – UK GDP grew by a mere 1.4% in 2019.

The unemployment rate has hovered at around 5% for the past five years or so, but must be currently flattered by the government’s Job Retention Scheme. There are people on furlough who won’t have a job when the scheme ends in September.

“There is still a fantastic opportunity for many individual enterprises – the online pureplays, young new brands and retailers not saddled with a tarnished history or too large a store estate”

And we don’t yet know what the full effects will be as a result of Brexit.

While much of this sounds rather negative for the retail industry in aggregate, there is still a fantastic opportunity for many individual enterprises – the online pureplays, young new brands and retailers not saddled with a tarnished history or too large a store estate. 

New business models are emerging for reselling and renting. Many prime store locations are becoming vacant due to the demise of the physical space previously occupied by Debenhams, Topshop et al, but could be re-let to a new tenant at a much more affordable level of rent. 

However, great care needs to be exercised here because some retail locations will be diminished by a John Lewis closure or the high level of unoccupied shops.

I fear that once all the constraints of lockdown are removed, we will be shocked by the effect these closures will have in many high streets around the country. 

In the near term, to fully restart physical retail we need customers to return to their pre-Covid behaviour.

Going out to the workplace

Some large employers are being very unhelpful in this respect, by not encouraging people to return to the workplace. Over the course of the pandemic, we have learnt that it is possible to work from home but it definitely isn’t ideal for all of our working time. 

To optimise teamwork and maintain our mental health, we need to be in the same physical space. Our work and social lives intermingle, which is no bad thing. Dry-cleaners, cobblers, coffee shops, sandwich bars, pubs and wine bars after work – all rely on this footfall. 

Not everyone has the luxury of a suitable ‘working environment’ at home, so people should be helped by their employers to return.

Going out shopping

Online shopping has enjoyed a period of trading with almost no competition. Everyone has now discovered this channel and, while there are isolated examples of the customer experience not being what it should, it generally works very well. 

However going shopping, whether alone or with friends, is fun – you get to see what everyone else is up to, who they are with, what they are wearing.

It will take time for everyone to return to the large urban centres and some malls. Some people are clearly spooked about travelling on public transport and what happens in terms of social distancing when they arrive at their destination.

Going on holiday

This is when many of us lose our normal financial budgetary constraints and buy stuff, both before we depart and while we are away.

Many of our large cities and small tourist centres rely on this footfall. Staycations are clearly going to be popular in the short-term, which is helpful, but international holidays will take longer to revive as no one wants to go into quarantine when they return home.

Retail will return. However, the journey, timing and destination are very uncertain.