More than 20,000 shops that closed their doors due to the coronavirus lockdown will never reopen
Thousands of shops that closed their doors this week due to the coronavirus lockdown will never reopen, experts have warned.
More than 20,000 stores will be lost by the end of the year, according to figures from the Centre for Retail Research, a massive leap on the 4,547 that closed in 2019.
Weeks of lockdown will lead to 235,000 jobs being lost, up from 93,000 in 2019, which was the worst year for retail for a quarter of a century.
Weeks of lockdown will lead to 235,000 jobs being lost, up from 93,000 in 2019, according to figures from the Centre for Retail Research
The research suggests the effect of the pandemic on Britain’s town and city centres will last longer than the shutdown.
Laura Ashley became the first major firm to go bust last week as it failed to secure a £15million cash injection.
Next has said it is preparing for a sales hit of up to £1billion, raising alarm bells for less successful retailers.
And the closure of Primark stores is set to cost owner Associated British Foods £650million in lost revenues a month.
Professor Joshua Bamfield, director at the Centre for Retail Research, believed plans to shut shops are already being made in boardrooms.
‘We expect large retail businesses to now be looking at exactly how many stores they expect to operate in 2021 and beyond in order to trade successfully moving forward.’
Prime Minister Boris Johnson said on Monday that all non-essential shops would have to close for at least three weeks as the country tries to stop the spread of the virus.
But Bamfield added that the Government’s efforts to help business will have taken some of the edge off some of the closures and job losses.
Non-food stores such as fashion will be hardest hit, with experts predicting some companies will see more than 80 per cent of their income fall away during the lockdown.
They have been forced to cancel dividends, defer capital investment and cut staffing costs by reducing hours or temporarily laying workers off – called ‘furloughing’.
Under the Government’s bumper £350billion package of measures, retail companies are exempt from business rates for a year, they can apply for loans to pay bills and defer VAT payments for three months.
Smaller businesses, which do not pay rates, can also apply for cash grants of up to £25,000 from their local council.
Supermarkets have seen an upswing in demand as those who would otherwise eat out or on-the-go stay at home.
Families have also stocked up with beer and wine, storecupboard essentials and items for the freezer.
The Centre for Retail Research predicts it could be the best year since 2011 for the supermarkets, though most of the 45,000 jobs created are not expected to be permanent.
The retail sector had sales of £384billion last year and employs almost 3.5m people both directly and in distribution and other retail services.