5000 stores to be “drained of their last resources” due to two-week retail lock down extension

Thousands of extra stores could be forced to close due to the two-week delay in opening up non-essential retail stores, according to new research.

Ecommerce specialist ParcelHero warned that the government’s Phase 2 recovery strategy launched this week, which dictates that the majority of retailers must wait until June 15 to reopen their doors, could cause 5000 stores to shutdown permanently.

The government announced on May 11 that it would begin a phased reopening of the UK’s retail sector on June 1, leading many small and medium sized businesses (SMEs) to prepare for reopening.

However it was announced last week that only open-air markets, warehouse style retailers like Ikea and car showrooms where social distancing was easier to enforce were allowed to open on Monday, all be it with strict measures in place.

READ MORE: Apple reopens all 42 China stores after coronavirus closures

This extended lock down will “drain many businesses of their last resources and ensure at least a further 5,000 businesses will never reopen”, ParcelHero’s head of consumer research David Jinks said.

“The roadmap in the Government’s recovery strategy plan stated: ‘Phase 2: Opening non-essential retail when and where it is safe to do so, and subject to those retailers being able to follow the new COVID-19 Secure guidelines. The intention is for this to happen in phases from 1 June.’

“The assumption among most retailers had been that it would only be businesses where there would be social distancing problems, such as pubs and cafes, hairdressers and nail bars, that would not be reopening. Most retailers started preparing for a 1 June launch and were both surprised and dismayed when only open-air markets were given the green light.

“Outdoor markets, even in London where there are now 280, account for just 1.3% of the city’s retail sales. There’s little wonder Frasers Group chief financial officer, Chris Wootton, says reopening on 15 June instead of 1 June will “definitely put some businesses out of business.”

Furthermore the government’s Coronavirus Business Interruption Loan Scheme (CBILS) has currently only granted around half of all loan applications from SME’s adding further woes to struggling smaller companies.

Click here to sign up to Retail Gazette’s free daily email newsletter



Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.