After a Brutal Year, British Retail Prepares for a Rebound
LONDON — After holding their breath, and counting their losses during three lockdowns, British brands, retailers and industry bodies began breathing easier after a bumper reopening day on Monday.
Nonessential retailers and salons, which had been closed since before Christmas, have reopened for good — at least that’s what the British government is promising. Pubs, cafés and restaurants can now serve customers outdoors, while indoor spaces will open next month.
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Having to shut over the past five months — and during the lucrative Christmas, New Year’s, Valentine’s Day and Easter holidays — was a major blow to retailers, many of which were forced to downsize, lay off workers or shut altogether.
This week, though, the mood in London was electric, with families meeting each other for coffee or lunch outside; shaggy-haired adults and children finally getting their moment in the salon or barber’s chair, and fashion and luxury sneaker lovers desperate to browse the shops, feel the fabric and try on the clothes.
By 5 p.m. on Monday, footfall on U.K. high streets alone had risen by nearly 530 percent year-on-year, while in Central London that figure was up 660 percent compared with 2020 when the country was in the thick of lockdown number one, according to Springboard.
Footfall across all U.K. retail destinations on Monday was up 155.2 percent from the corresponding day last week, April 5. The rise in footfall in high streets was 176.1 percent compared with last week.
Diane Wehrle, insights director at Springboard, described the turnout on Monday as “amazingly positive. The strong uplift highlights that consumer demand is higher than even forecast and shows that brick-and-mortar still holds a key position within the retail sector, which can finally see a visible road to recovery after a difficult year.”
That momentum will build through this week, and into the summer, according to analysts at Peel Hunt.
“We expect (royal funeral notwithstanding) that trading will build well into the weekend, and develop into a very strong summer. The early signs are that social distancing is almost a non-issue for customers, and that any hopes they had of a ‘red banner,’ heavy discount restart are not likely to be fulfilled. The new normal will be different, but the winners before will probably win again now,” said the analysts, referencing the funeral of Prince Philip on Saturday, which will be a somber but very restricted affair due to ongoing coronavirus precautions.
Eric Hazan, senior partner at McKinsey & Company, said he believes the reopening of stores could create a virtuous circle and “act as a trigger for a 2021 spending splurge. Despite decreased household income and increased savings, 47 percent of consumers intend to splurge in 2021 to reward themselves.”
Hazan noted the latest McKinsey U.K. Consumer Sentiment Research revealed that post-lockdown spending is expected to be highest in travel (55 percent) and dining (53 percent). Beauty and personal care will represent 38 percent of spending while apparel, shoes and accessories will make up 35 percent.
Retail sales from newly reopened stores should bolster an economy that has only just begun to recover from lockdowns and Brexit disruptions.
According to the Office of National Statistics, U.K. exports to the European Union in February rose 46.6 percent to 11.6 billion pounds, following a 42 percent decline in January, immediately following the U.K.’s exit from the bloc.
The ONS said that, overall, the U.K. economy grew by 0.4 percent in the month of February, although, it was still 7.8 percent smaller than in the corresponding month of 2020, before lockdown.
Jace Tyrrell, chief executive officer of New West End Company, which represents 600 businesses on Oxford Street, Bond Street, Regent Street and in Mayfair, believes there are many reasons to be optimistic about the retail recovery in Central London.
“It has been a difficult year for retail and hospitality, but the multiple lockdowns of 2020 have shown us that we can reopen safely and sustainably. The ongoing success of the vaccination program has given us the boost we desperately need to save jobs and viable businesses. The recovery will be gradual, but with significant inward investment we feel confident our district has a bright and repurposed future,” she said.
The Cadogan Estates, which owns much of the retail around Sloane Square and the King’s Road, has been investing steadily over the past year, helping its current retailers with rents, and introducing new brands to the neighborhood. Newcomers this spring and summer will include Ralph Lauren’s new World of Ralph Lauren opening its newest flagship in Sloane Square, and Burberry and Balenciaga openings on Sloane Street.
The King’s Road will welcome a Ganni store, while Rixo has signed a permanent lease following the success of its long-term pop-up on the street. Cadogan has also added more than 500 outdoor seats across the neighborhood, allowing restaurants, pubs and cafés to reopen safely.
Salons, barbers and aestheticians also have reason to be hopeful, in London and throughout the U.K., according to the commercial insurance company Simply Business.
The organization said that according to its research, 99 percent of hair and beauty professionals in the U.K. expect their businesses to survive past 2021. It added that the vaccine rollout has boosted confidence among hairdressers, beauticians and salon owners alike.
Although businesses organizations remain optimistic about stores’ reopening, they know there’s still a hill to climb, especially in London.
“London has been disproportionately hit,” said Ros Morgan, CEO of the Heart of London Business Alliance, which represents 500 businesses, including property owners and developers, theaters, hotels, retailers and the National Gallery.
“As an interdependent ecosystem with many businesses reliant on each other to draw people in, London now needs people back on its streets breathing life back into our capital city. We know this won’t be immediate, with the return of office workers and international tourists still some time away. But there are ways to accelerate London’s recovery, and increasing footfall is critical for this.
“When London succeeds, so does the rest of the U.K. That is why we need the government to pull out all the stops now to support London, promoting our capital as a great and safe place to visit with incentives for people to return, and ensuring public transport is clean, safe and accessible,” she added.
