Retailers in England are back in business

Extra percaution: A social distancing notice at a Marks & Spencer branch. Getting people back into stores is crucial for Britain’s US$500bil retail industry. — Reuters

LONDON: Retail outlets in England selling non-essential items are opening for the first time since March, as the government eases restrictions put in place to curb the coronavirus.

Businesses have installed sneeze screens, “sanitation stations, ” and other features to make shopping more hygienic once they open up. Whether customers will feel safe enough to return in large numbers remains to be seen.

Getting people back into stores is crucial for Britain’s £400bil (US$500bil) retail industry, and for the country at large, which relies on consumer spending for about 60% of gross domestic product.

Retailers employ more than three million people and contribute to the social and economic fabric of town centres across England.

At its flagship outlet on Oxford Street, Marks & Spencer Group Plc has installed at least 20 large signs, 150 floor markings to reinforce the need for social distancing, sneeze screens on 11 checkout points and three hand sanitiser units at its main entrances. When it reopened yesterday, changing rooms and cafes would be closed, and services such as bra fitting have been paused. Retailers elsewhere are taking similar steps.

“All of the evidence from reopenings around Europe indicates that we will see footfall significantly down on the previous years before a recovery begins, ” said Richard Lim, chief executive officer of Retail Economics, a consulting firm.

The UK economy shrank by a fifth in April, and could be headed for its biggest contraction in three centuries in 2020.

To encourage consumers to hit the stores, Prime Minister Boris Johnson suggested during a Sunday trip to Westfield mall that regulations requiring people to stay 2m apart in public spaces could be relaxed as infection rates fall.

“People should shop, and shop with confidence, ” he said.

Desperate to re-start the economy, Johnson must avoid unleashing a second wave of the virus. Britain has lagged behind European neighbours in its handling of the pandemic and in getting businesses back up and running.

More than 41,700 people have died from the virus in the UK, the most in Europe, undermining confidence in the government and leaving many individuals concerned about returning to crowded trains, town centres and shopping malls.

“We need to get Britain’s economy firing again, while at the same time making sure we keep people safe and avoid a second peak of the disease, ” business secretary Alok Sharma wrote in a column for the Express newspaper. “Britain can enjoy shopping again, although not quite in the same way as before.”

Consumer trust that retailers are doing their best to keep them safe is even more important at a time when confidence in the government and the economy is low.

Jessica Moulton, UK head of retail at McKinsey & Co, said the most recent survey by the firm showed just 15% of British consumers were optimistic about the economy’s ability to return to normal in the next few months.

Similarly, a survey of more than 1,000 consumers by Dynata LLC, a market research firm, showed that 42% of consumers thought it was still too early to reopen stores.

Only one in 10 said they intended to visit a non-essential retailer yesterday. While stores in England are reopening, those in Scotland are on a different schedule.

“I am not that interested in going to the shops right now, ” said Joanne James, founder of Jo & Co Property Management in South London.

“Walking around with a face mask is pretty uncomfortable so that would definitely take away the whole enjoyment factor of shopping. I have also got very used to having everything I need being delivered to my door.”A hesitancy by consumers to rush back to the shops would bode well for online retailers such as Asos Plc, Boohoo Group Plc and Inc, which have already gotten a boost during the pandemic.

McKinsey’s Moulton said the experience in Germany and Austria, where shops have been open for more than a month, shows that some locations recover more quickly than others.

Local open-air shopping streets, for instance, have fared better than closed malls or busy city center locations that require people to travel by bus or train.

Wearing a mask becomes mandatory on public transport in England yesterday, another potential disincentive.

Where stores have reopened in Europe, retailers have seen far fewer customers, but their average purchases have jumped by between 10% and 40%.

“People are shopping around less, and making fewer shopping trips than before, but are buying more when they do shop, ” said Moulton.

“There is a lot of pent-up demand out there.”

For some UK retailers sitting on mountains of unsold stock, it may be a case of too little too late. — Bloomberg

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