Nationwide lockdown in March saw up to 80% of retailers cease trading temporarily, report finds
The Local Data Company has published a new report exploring the impact of the extremely challenging first few months of the year on retailers, including the nationwide lockdown, which saw up to 80 percent of the retail sector cease trading temporarily.
Entitled ‘H1 2020 retail and leisure trends’, the report looks at the monumental impact of the COVID-19 pandemic on retailers across the UK, as stores were forced to close during the lockdown period in March and consumer habits subsequently changed.
The foreword reads: “H1 2020 has been one of the most turbulent, unpredictable and challenging periods for the entire UK economy. Retail and leisure businesses have been, and are still being hit hard as the COVID-19 pandemic continues to have a monumental impact on lives and livelihoods.”
However, the Local Data Company (LDC) notes that during these unprecedented circumstances, retailers have found innovative ways of adapting to meet changing consumer needs, with new opportunities presenting.
One key finding from the LDC’s insights report unveiled that following the nationwide lockdown period in March – which saw all but those retailers deemed ‘essential’ being forced to temporarily shut – the total Vacancy Rate rose to 13.2 percent. LDC says this is the highest vacancy rate it has recorded since its records began in 2013.
Despite this high vacancy rate, LDC says this could present a compelling opportunity for smaller retailers, who may see this as a time to expand their portfolio, with deals to be made on newly available property in areas they may have not considered opening previously due to high rental costs.
Additionally, LDC suggests that larger retailers with multiple stores may also look to reposition their location strategy and target areas which are recovering faster, such as suburban areas or London villages. Data shows the reopening rate in outer city locations is higher than city centres across 80 percent of the biggest cities in Great Britain.
The report further uncovered an acceleration in the migration of online spending, as consumers limited all non-essential travel due to the coronavirus and shoppers increasingly turned to digital retail channels. LDC’s report says that online retailing now accounts for 28.1 percent of total spend, up from 19.7 percent in August 2019.
This presents an important opportunity for mobility retailers to expand their digital presence and consider how to reach consumers online, as shoppers may be fearful to return to stores during the second nationwide lockdown, particularly as many consumers in the mobility sector are elderly and disabled, who may be more clinically vulnerable to COVID-19.
Resilience amongst independent retailers
Encouragingly, the report unveiled that independent retailers have been more resilient through the first half of 2020, continuing this trend from 2019. The report says the decline in independent retailers has been less pronounced across a variety of retail sectors, when compared with multiples.
LDC adds that government support initiatives such as furlough (LINK), business rates relief and the moratorium on tenant evictions have helped independents to weather the storm brought about by the COVID-19 pandemic.
Looking at lockdown closures, in line with UK Government guidance on 23 March 2020, over two-thirds of Great Britain retailers were forced to shut as they were classified as ‘non-essential’. Following these forced closures, many retailers who were classified as ‘essential’ also closed to protect staff, resulting in 83 percent of all stores closing by the end of March.
Furthermore, the report explores COVID-19 footfall trends across a range of retail locations, including high streets, shopping centres and out of town locations.
Unsurprisingly, statistics show that footfall was lower in the two weeks leading up to lockdown (-9 percent and -22 percent week-on-week) but dropped significantly by 55 percent in the week lockdown was announced by Prime Minister Boris Johnson. From this point, LDC says that footfall continued to fall but at a much slower rate as shoppers acclimatised to the new rules.
From a low at the end of April, footfall slowly increased as restrictions were gradually relaxed, rising week-on-week by 5-8 percent throughout the whole of May, the report adds.
The report adds: “The most dramatic change was in the week of the 15th June when non-essential retail was given the green light to reopen, causing a 34 percent week-on-week jump in footfall as shoppers rushed back to the high street, releasing pent-up demand built up during lockdown.”
However, as coronavirus cases began to dramatically increase from 14 September 2020, footfall began declining week-on-week with a fall of one percent – the first week since April to see a decline in footfall.
Considering the impact of COVID-19 on the retail sector and drawing on findings throughout the report, LDC says that retailers should continue to be agile, adapting to local lockdowns and changing government mandates, while also strategically reviewing their portfolios and planning for a future retail climate which is hard to predict.
The report further recommends that local authorities and government are proactive to support their local economy’s recovery and survival. It says that councils should take a more bespoke approach to support retailers that have been hit the hardest by the coronavirus pandemic.https://thiis.co.uk/nationwide-lockdown-in-march-saw-up-to-80-of-retailers-cease-trading-temporarily-report-finds/https://i1.wp.com/thiis.co.uk/wp-content/uploads/2020/11/LDC-retail-insights-report.jpg?fit=900%2C899&ssl=1https://i1.wp.com/thiis.co.uk/wp-content/uploads/2020/11/LDC-retail-insights-report.jpg?resize=150%2C150&ssl=1NewsroomReports & ResearchRetailer NewsSector NewsTrade NewsCOVID-19 footfall trends,high street stores,Local Data Company,lockdown,mobility retailers,mobility stores,Online Shopping,retail sector,retailers,vacancy ratesThe Local Data Company has published a new report exploring the impact of the extremely challenging first few months of the year on retailers, including the nationwide lockdown, which saw up to 80 percent of the retail sector cease trading temporarily. Entitled ‘H1 2020 retail and leisure trends’, the report...Sarah SarsbySarah Sarsbysarah@thiis.co.ukAdministratorTHIIS Magazine