How British business is preparing for lockdown 2
England plunges into a new lockdown today as the Government battles to bring Covid-19 infections under control.
For businesses across all sectors there is one silver lining: lessons from the spring can be applied to lockdown 2.0, with companies re-activating contingency plans, sending workers home and scrambling to lock down supply. Here's what firms across the business world are doing to prepare.
Consumer industry
By Hannah Uttley
Consumer goods firms have been some of the biggest beneficiaries of the crisis, particularly those that specialise in hygiene and household staples. But a shortage of certain items such as toilet roll and household cleaning products as customers stockpiled in the first lockdown has encouraged manufacturers to ramp up capacity in preparation for another potential rush.
At Reckitt Benckiser, which owns Dettol and Durex condoms, production has shifted from areas where demand has been lower during the pandemic toward highly sought after items such as cleaning products and hand sanitiser. It has also hired new contractors to help with the extra packaging needed to meet demand.
With sales of sexual health products lower as people socialise less, Reckitt has been using packaging normally reserved for its K-Y lubricant brand to use for distributing its hand sanitiser.
Measures such as these meant Reckitt was able to manufacture the equivalent amount of hand sanitiser within 30 days that it would normally produce in a year.
At toilet paper manufacturer Kimberley-Clark, almost 100m Andrex toilet rolls have been set aside in UK warehouses as the country enters a second lockdown. It has also been busy creating new products in an effort to cash in on the major shift in consumer behaviour sparked by the crisis.
The group is launching a new range of Kleenex products called Kleenex Proactive Care to cater specifically for coronavirus-related needs. The new line will include masks, hand gel, wipes and hand towels, reflecting how Covid-19 has prompted an increased focus on health and hygiene.
Finance
By Michael O'Dwyer
The financial sector is better equipped than most to deal with the second lockdown. Most employees are able to work from home and firms generally adapted well to the first lockdown earlier this year.
NatWest, which owns Royal Bank of Scotland, had already told 50,000 staff in July they would be working from home until next year. Investment firm Standard Life Aberdeen has taken a similar approach, so employees will notice no change when England’s new restrictions kick in on Thursday.
Banks, wealth managers and law firms are already making working from home a part of their normal working arrangements. JPMorgan, Schroders and Linklaters all called a permanent halt to the daily commute before Prime Minister Boris Johnson announced new Covid curbs.
At the other end of the spectrum, firms such as Goldman Sachs and Deutsche Bank had been ramping up the number of people in their offices, but have now reversed this and are sending workers home.
About 95pc of JPMorgan’s 12,000 employees in London will return to logging on from their spare rooms, including the majority of its traders.
Accountant PwC, which has been a proponent of offices during the crisis, has been forced to take similar action. About half of its 22,000 people in the UK had returned to the office at least once in recent months.
BDO expects its offices will be completely shut until at least Dec 2. The firm will close its 16 English offices on Thursday and Friday while it reviews the Government’s final guidance. Looser restrictions in Scotland mean its offices north of the border remain open.
The firm furloughed 700 trainees and support staff at the start of the pandemic but all employees have now returned to work, a spokesman said.
Deloitte is to permanently close four offices and require about 500 staff to work from home permanently.
Industry and support services
By Alan Tovey
Lockdown 2.0 is business as usual for the industrial sector – or as usual as it can be.
In the spring most manufacturers were told to keep working by the Government and thereby became test cases in establishing ways to keep operating, with their practices being copied by other sectors.
Measures put in place since then have been maintained as companies understood that coronavirus was at the very least a medium, if not long-term, issue.
One example is defence giant BAE Systems. Days into the first lockdown it was identified as a critical player in the nation’s defence.
Out of its 34,000 UK staff, some 21,000 are still working from home, with only periodic visits to offices.
The 13,000 staff who remain in plants, delivering programmes such as building warships, are using practices such as elongated shift patterns to maintain output.
These measures cap the number of workers on site at once, while zoning systems keep groups of workers together in bubbles to limit infection risks. BAE sites also operate temperature checks to indicate coronavirus symptoms.
Car companies have tried to strengthen supply lines, but are hampered by their just-in-time manufacturing processes, which mean parts often arrive only hours before assembly. Most say it is almost impossible to stockpile the tens of thousands of individual parts required because of cost or even the physical space required.
However, the closure of car dealers during lockdown will lower demand for new cars, easing pressure on plants.
Outsourcers, such as cleaning contractors and security staff, may be in high demand to look after premises that need improved hygiene regimes or looking after as they stand empty.
At the start of the last lockdown, Rentokil had 400 people in specialist disinfection; numbers in that division have risen to 2,500.
Mitie has also reported similar demand, saying £125m of cleaning and security contracts it won over the past six months were “directly attributable to Covid-19”.
Events and media
By Ben Woods
Britain's £11bn events industry hopes to reopen at the end of a second lockdown after its safety measures won the backing of health officials.
The Association of Event Organisers hopes it can now convince ministers to reverse a decision to block events, which has kept the industry shut since March.
It comes after a pilot event held in September proved to Public Health England and the Health and Safety Executive that corporate events can operate safely during the pandemic.
Chief executive Chris Skeith said: "I am very much hoping that lockdown 2.0 gives the government the opportunity to reopen us, as they reopen the rest of the economy.
"That is based on the fact that we have proven our safety case and that they need us to get business going again.
"We have track and trace data that we have held for decades on our audiences. We know who is coming, we can tell them what time to come, we can tell them what time to leave.
"We are in the business of controlling audiences and creating safe environments, and have been for decades."
Meanwhile, the nation's burgeoning film and television production sector has been given the green light to continue working but has needed to seek clarity over a second lockdown.
The sector was allowed to reopen earlier this year by enforcing social distancing and making actors form bubbles with their co-stars and production staff.
John McVay, chief executive of PACT, the industry body, said: "There have been more clarifications because of the [coronavirus measures] of the four separate nations.
"We have had to clarify with Scotland whether an English film crew can go and film something there, given the First Minister Nicola Sturgeon has said 'we don't want people travelling from England to Scotland'.
"There isn't a problem because it is for work purposes.
"We have also had to clarify if we are filming in someone's house and they are unpaid contributors – if we are filming a documentary – could we still do that. The answer is also yes, we can."
Retail industry
By Laura Onita
The return of the furlough scheme will be a boon for non-essential retailers that have to shut for a month. George Weston, the boss of Primark, said the firm was still “working out the mechanics of how to access” the scheme the second time around.
Primark will also seek support from landlords, but it declined to say whether it will withhold rent or not. The retailer will not cancel any orders that it has already placed with suppliers, but “whether we delay placing new orders depends how long this lockdown lasts”, it said.
Other non-essential retailers will also seek to expand and improve their click-and-collect offering to make up for lost sales during the key festive period.
Ikea, the flatpack furniture seller, will offer click-and-collect at all stores in England, free for purchases over £300; it has also introduced a new delivery option to DPD pick-up points across the country from £2.
Most of the social distancing measures implemented in supermarkets during the first lockdown are still in place.
The likes of Asda and Morrisons have recruited or reinstated more marshals outside stores and in the aisles.
Asda said it was adding an extra 700 sanitisation stations at the front of stores to 3,500 stations already in place. It is also applying Covid-proof coating on trolleys to fight a second wave of coronavirus.
Transport and travel
By Oliver Gill
Public transport, currently bankrolled by the taxpayer, will continue during the second lockdown to ensure that key workers can make it to hospitals, schools and offices.
While there has yet to be an announcement on public transport timetable changes, a major update is not expected, primarily because this would take several weeks to plan – by which point it is hoped that the restrictions will be relaxed.
Airports, however, are preparing for a lean month. Boris Johnson banned non-essential travel over the weekend, meaning that those flights that do take off will only have a handful of people on board. Although many scheduled services will continue, most holiday flights have been cancelled.
Tui, the UK’s biggest travel company, has cancelled all holidays and flights from England and Wales between Thursday and Dec 2. UK chief Andrew Flintham says: “We hope we can take our customers away to the sunshine soon so they can escape the long, cold winter nights.”
Other travel operators are scrambling to see what services can still go ahead and which ones will need to be cancelled. British Airways, for example, said it would get in touch with customers whose flights will not take off.
With thousands of job cuts completed or under consultation, the travel industry’s priority is looking beyond the next four weeks in the hope that an affordable testing regime can be put in place.
The winter months tend to be loss-making for many firms, and their major concern is ensuring that the crucial summer holiday season is not ruined next year.
Leisure and hospitality industry
By Simon Foy
Businesses in the hospitality and leisure sectors will be leaning heavily on the revived furlough scheme to cut costs during the second lockdown.
Having been allowed to operate since June 4, pubs, restaurants, gyms and cinemas are being forced to shut once again and put the vast majority of their staff back on the Government’s job retention scheme.
Economists predict that the number of furloughed workers will double this month to as many as 5.5m, with a significant chunk of the increase coming from the hospitality and leisure sectors.
A spokesman for JD Wetherspoon said around 40,000 staff from its pubs and head office would go back on the wage support scheme, while Pure Gym, the UK’s biggest gym chain, will furlough approximately 2,500 employees as it shutters its 235 outlets.
But it is not all bad news – at least for some businesses. Restaurants in particular will be thrown a lifeline through delivery and click-and-collect services that provide some revenue during lockdown.
For example, Casa Italia, a restaurant in central Liverpool, set up a delivery service after being forced to shut its doors in March.
Arran Campolucci-Bordi, the restaurant’s manager, said it had been a huge success and he is in the process of purchasing a new warehouse to cope with the growing demand.
The popularity of the delivery business has meant that the restaurant has been able to avoid laying off any staff by redeploying them as drivers, and has even hired 10 new employees.
