Retailers and hospitality firms have warned of the devastating financial impact of a new month-long lockdown in England which they say threatens billions of pounds worth of Christmas trade and puts hundreds of thousands of jobs at risk.
The next two months should be the most lucrative time of the year for the high street but 500,000 shops, restaurants and pubs will have to close on Thursday and remain shut until 2 December.
Shoppers usually spend around £50bn on goods other than food in the weeks leading up to Christmas as they gift clothes, toys and the latest technology to friends and family. But the new measures will force about 363,000 specialist stores to close, leaving major retailers such as Marks & Spencer and John Lewis with mountains of stock to shift through their websites and the click-and-collect services still allowed to operate.
The challenge faced by retailers is underlined by the prediction that shopper numbers in England will drop by about 80% during the November lockdown as Britons are told to shop only for essentials.
Diane Wehrle, insights director at Springboard which tracks shopper numbers, said the restrictions meant retailers would now miss out on “essential weeks of Christmas trading, including Black Friday”.
During the spring lockdown, the closure of non-essential retail stores meant the high street missed out on £1.6bn of sales each week. The British Retail Consortium (BRC) said the importance of the festive shopping period meant losses are certain to be much bigger and would impact the viability of “thousands of shops and hundreds of thousands of jobs”. The fashion retailer Next said even a fortnight-long lockdown would cut its sales by about £57m.
Richard Lim, the chief executive of Retail Economics, said the new lockdown was a “devastating blow” for the industry. “Small retailers remain in survival mode and profits made during the festive period will determine whether they continue to trade into the new year,” he said.
Quick GuideUK retail and hospitality job cuts on back of Covid-19 crisis
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Marston's - 2,150 jobs
15 October: Marston's - the brewer which owns nearly 1,400 pubs, restaurants, cocktail bars and hotels across the UK - said it would cut 2,150 jobs due to fresh Covid restrictions. The company has more than 14,000 employees.
Whitbread - 6,000 jobs
22 September: Whitbread, which owns the Premier Inn, Beefeater and Brewers Fayre chains, said it would cut 6,000 jobs at its hotels and restaurants, almost one in five of its workforce
Pizza Express – 1,100 jobs
7 September: The restaurant chain confirms the closure of 73 restaurants as part of a rescue restructure deal.
Costa Coffee – 1,650 jobs
3 September: The company, which was bought by Coca-Cola two years ago, is cutting up to 1,650 jobs in its cafes, more than one in 10 of its workforce. The assistant store manager role will go across all shops.
Pret a Manger – 2,890 jobs
27 August: The majority of the cuts are focused on the sandwich chain's shop workers, but 90 roles will be lost in its support centre teams. The cuts include the 1,000 job losses announced on 6 July.
Marks & Spencer – 7,000 jobs
18 August: Food, clothing and homewares retailer cuts jobs in central support centre, regional management and stores.
M&Co – 400 jobs
5 August: M&Co, the Renfrewshire-based clothing retailer, formerly known as Mackays, will close 47 of 215 stores.
WH Smith – 1,500 jobs
5 August: The chain, which sells products ranging from sandwiches to stationery, will cut jobs mainly in UK railway stations and airports.
Dixons Carphone – 800 jobs
4 August: Electronics retailer Dixons Carphone is cutting 800 managers in its stores as it continues to reduce costs.
DW Sports – 1,700 jobs at risk
3 August: DW Sports fell into administration, closing its retail website immediately and risking the closure of its 150 gyms and shops.
Marks & Spencer – 950 jobs
20 July: The high street stalwart cuts management jobs in stores as well as head office roles related to property and store operations.
Ted Baker – 500 jobs
19 July: About 200 roles to go at the fashion retailer’s London headquarters, the Ugly Brown Building, and the remainder at stores.
Azzurri – 1,200 jobs
17 July: The owner of the Ask Italian and Zizzi pizza chains closes 75 restaurants and makes its Pod lunch business delivery only
Burberry – 500 jobs worldwide
15 July: Total includes 150 posts in UK head offices as luxury brand tries to slash costs by £55m after a slump in sales during the pandemic.
Boots – 4,000 jobs
9 July: Boots is cutting 4,000 jobs – or 7% of its workforce – by closing 48 opticians outlets and reducing staff at its head office in Nottingham as well as some management and customer service roles in stores.
John Lewis – 1,300 jobs
9 July: John Lewis announced that it is planning to permanently close eight of its 50 stores, including full department stores in Birmingham and Watford, with the likely loss of 1,300 jobs.
Celtic Manor – 450 jobs
9 July: Bosses at the Celtic Collection in Newport, which staged golf's Ryder Cup in 2010 and the 2014 Nato Conference, said 450 of its 995 workers will lose their jobs.
Pret a Manger – 1,000 jobs
6 July: Pret a Manger is to permanently close 30 branches and could cut at least 1,000 jobs after suffering “significant operating losses” as a result of the Covid-19 lockdown
Casual Dining Group – 1,900 jobs
2 July: The owner of the Bella Italia, Café Rouge and Las Iguanas restaurant chains collapsed into administration, with the immediate loss of 1,900 jobs. The company said multiple offers were on the table for parts of the business but buyers did not want to acquire all the existing sites and 91 of its 250 outlets would remain permanently closed.
Arcadia – 500 jobs
1 July: Arcadia, Sir Philip Green’s troubled fashion group – which owns Topshop, Miss Selfridge, Dorothy Perkins, Burton, Evans and Wallis – said in July 500 head office jobs out of 2,500 would go in the coming weeks.
SSP Group – 5,000 jobs
1 July: The owner of Upper Crust and Caffè Ritazza is to axe 5,000 jobs, about half of its workforce, with cuts at its head office and across its UK operations after the pandemic stalled domestic and international travel.
Harrods – 700 jobs
1 July: The department store group is cutting one in seven of its 4,800 employees because of the “ongoing impacts” of the pandemic.
Harveys – 240 jobs
30 June: Administrators made 240 redundancies at the furniture chain Harveys, with more than 1,300 jobs at risk if a buyer cannot be found.
TM Lewin – 600 jobs
30 June: Shirtmaker TM Lewin closed all 66 of its outlets permanently, with the loss of about 600 jobs.
Monsoon Accessorize – 545 jobs
11 June: The fashion brands were bought out of administration by their founder, Peter Simon, in June, in a deal in which 35 stores closed permanently and 545 jobs were lost.
Mulberry – 470 jobs
8 June: The luxury fashion and accessories brand is to cut 25% of its global workforce and has started a consultation with the 470 staff at risk.
The Restaurant Group – 3,000 jobs
3 June: The owner of dining chains such as Wagamama and Frankie & Benny’s has closed most branches of Chiquito and all 11 of its Food & Fuel pubs, with another 120 restaurants to close permanently. Total job losses could reach 3,000.
Clarks – 900 jobs
21 May: Clarks plans to cut 900 office jobs worldwide as it grapples with the growth of online shoe shopping as well as the pandemic.
Oasis and Warehouse – 1,800 jobs
30 April: The fashion brands were bought out of administration by the restructuring firm Hilco in April, with all of their stores permanently closed and 1,800 jobs lost.
Cath Kidston – 900 jobs
21 April: More than 900 jobs were cut immediately at the retro retail label Cath Kidston after the company said it was permanently closing all 60 of its UK stores.
Debenhams – 4,000 jobs
9 April: At least 4,000 jobs will be lost at Debenhams in its head office and closed stores after its collapse into administration in April, for the second time in a year.
Laura Ashley – 2,700 jobs
17 March: Laura Ashley collapsed into administration, with 2,700 job losses, and said rescue talks had been thwarted by the pandemic.
Analysts said the closure of the high street would push shoppers into the arms of online specialists such as Amazon. The British Independent Retailers Association said a quarter of independent retailers did not survive the last lockdown and the sector risked being “decimated” by a second.
Waterstones managing director James Daunt said the pandemic had been “very, very, very, very, underline ‘very’ as many times are you like, good for Amazon” but bad for small high street businesses.
The bookseller could still despatch web and click-and-collect orders from its stores but independent stores would not have that infrastructure to fall back on. “For a big retailer like Waterstones there is a narrow and difficult path through this but I worry for people without that additional capability,” said Daunt.
Even before the lockdown was announced Amazon had warned the tilt towards online shopping meant even it was going to be “stretched” to meet the huge volume of orders expected. Similarly Gary Grant, the founder of The Entertainer, has warned that couriers were “already overloaded” and the toy industry would face a struggle to get toys into children’s hands in time.
Lim said the shift towards online shopping this Christmas would now be of “epic proportions” and there were serious doubts over whether the industry could cope. “There will be a strain on websites, warehouses and, crucially, delivery networks,” he said. “The industry just isn’t set up for such a colossal switch to online.”
The weeks of frenetic socialising in the run-up to Christmas and new year are also extremely important for Britain’s struggling pubs, restaurants and hotels. Some venues bank as much as 40% of their annual profits between Halloween and January. But this year nearly 53,000 pubs, restaurants and cafes in England will have to shut, according to data from the retail estate adviser Altus Group.
Hospitality firms were already buckling under the strain of existing restrictions such as the 10pm curfew. UKHospitality, the industry trade body, said the costs of a second lockdown would be “even heavier than the first” as some businesses, such as nightclubs, had never even re-opened.
Kate Nicholls, its chief executive, said the hospitality industry had been “pushed to the limits” by the pandemic, with many venues already closing. “For those that have survived, viability is on a knife edge.”