UK Prime Minister Boris Johnson unveiled his roadmap to begin easing England's COVID-19 lockdown this past Monday, and businesses in the embattled retail and hospitality sectors told Sputnik that they welcome having a date to work towards, although warned that more government support was necessary to help firms bounce back from a year of disruption
MOSCOW (Pakistan Point News / Sputnik - 25th February, 2021) UK Prime Minister Boris Johnson unveiled his roadmap to begin easing England's COVID-19 lockdown this past Monday, and businesses in the embattled retail and hospitality sectors told Sputnik that they welcome having a date to work towards, although warned that more government support was necessary to help firms bounce back from a year of disruption.
In the first week of January, the prime minister announced that England would be placed under nationwide lockdown measures for the third time since the start of the pandemic. The tougher restrictions were brought in to help curb the spread of a new highly infectious COVID-19 variant first identified in southeast England that was blamed for a surge of cases in December.
The lockdown restrictions forced the closure of non-essential shops, which will be allowed to open from April 12, and hospitality venues, including bars and restaurants, which will only be able to serve customers indoors from May 17.
Retail and hospitality have been two of the most severely impacted economic sectors by the ongoing pandemic. According to a study published by the British Retail Consortium (BRC) earlier in February, non-food retailers have lost 22 billion Pounds ($31 billion) as a result of the coronavirus-related lockdowns.
Turnover in the hospitality sector more than halved from 133 billion pounds ($187 billion) to 61 billion pounds ($86 billion) in 2020, according to a study conducted by trade bodies UKHospitality and the British Coffee Association.
Chancellor Rishi Sunak is set to present his spring budget this coming Wednesday, and many in the retail and hospitality sectors are hoping for further government support to help ensure that businesses can survive once they have reopened their doors to customers and staff members come off furlough.
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As part of the prime minister's self-proclaimed "cautious" lockdown easing plan, hospitality venues are set to be allowed to serve people outdoors from April 12, with restaurants and bars permitted to welcome customers indoors from May 17.
"Very positive about this statement, now we have a confirmed date for the end of this lockdown and that in itself allows us to work towards plans for reopening and put measures in place to make sure that we are prepared to open safely," Aktar Islam, the chief proprietor of Birmingham's Michelin-starred Opheem restaurant, said in a statement obtained by Sputnik.
This sentiment was shared by restaurateur Sam Morgan, the CEO of the We Are Craft group, who added that the government's guidance has lacked clarity throughout the pandemic to date.
"I welcome the PM giving some clarity all be it caveated for the hospitality sector to work to. During this pandemic, the biggest challenge has been the uncertainty and constant changes to legislation, guidance and requirements," Morgan said in a statement obtained by Sputnik.
England first went into lockdown this past spring to contain the initial wave of the COVID-19 pandemic. After months of stay-at-home orders, the government launched the Eat Out to Help Out scheme during the summer, which gave residents discount vouchers for restaurants in the hope of stimulating footfall.
The scheme was subsequently blamed for the emergence of several new COVID-19 clusters that contributed to the pandemic's second wave in the fall, although Philip Inzani, the founder of London's Polo Bar, said that there was no scientific link between hospitality venues opening and new coronavirus disease cases.
"There's still no conclusive proof that hospitality has been a cause for the surge in R rate [reproduction number], the industry has invested heavily in making their venues COVID secure and we still have around 12 weeks to wait until we can open," Inzani said in a statement obtained by Sputnik.
Hospitality business owners will be eager listeners to Sunak's upcoming budget statement to find out if the current furlough scheme, business rates holiday and the discounted VAT rate (five percent rather than 20 percent) would be extended even after the lockdown measures are lifted.
"Much more financial support is needed, an extension to the VAT relief which those not trading have seen no benefit from. It needs to be extended for all of 2021," Kieran Waite, co-founder of the Bristol-based Season & Taste hospitality group, said in a statement obtained by Sputnik.
Waite also raised issue with some of the government's lockdown easing plan, saying that it made "no sense" that businesses could not serve outdoor customers in a COVID-safe environment.
"But there is no sense whatsoever that people can buy a coffee from our cafe Bakers & Co and sit on a public bench across the road but cannot sit on our bench outside which we sanitize between guests," he said.
Opheem chief proprietor Aktar islam echoed the calls for an extension to the business support measures, including the current five percent VAT rate for hospitality firms even after venues can welcome dine-in customers.
"I do hope the support measures not only address difficulties now whilst under lockdown but also looks towards supporting business through the long road to recovery. Flexible furlough, business rates holiday and five percent VAT need to be continued as most businesses are now in debt and will return with restricted trading conditions which will negatively affect their ability to maximize on their trading potential," Islam said.
Additionally, We Are Craft CEO Sam Morgan said that the government's assistance to date has been insufficient to address the scale of the problem faced by the hospitality sector, and urged Sunak to take drastic measures to save thousands of businesses.
"The government should be under no illusion that this is only a sticky plaster over the impact of COVID-19 to this sector, previously inadequate support such as grants that covered less than 15 percent of a company's overhead has caused ever-lasting damage that the chancellor has to remedy given the average reported debt position of the sector sits at over a quarter of a million pounds ($353,000) per business," Morgan remarked.
Non-food retail outlets are also hoping for greater government help to navigate the coming months after weeks of enforced closures.
Total footfall on the UK's so-called high streets (shopping regions) fell 46.1 percent year-on-year in December, according to data published by the BRC, despite the country not being under lockdown measures at the time.
In a press release published on Monday, Helen Dickinson, the BRC's chief executive, said that the organization welcomed the "additional clarity" provided by the government, although added that ministers should allow non-essential retail outlets to "reopen as soon as the data suggests it is safe to do so."
Sophie Johnson, a lecturer in fashion business and promotion at Birmingham City University in the UK, told Sputnik that retailers have faced a two-pronged crisis as a result of the pandemic and the Brexit process.
"Fashion retailers at this point in time are in a really unique state of crisis. They have their own internal crises of sustainability or supply chains ... but the two biggest crises they're dealing with, one being COVID-19, and the other being Brexit," Johnson said.
According to the government's definition, fashion retailers come under the moniker of non-essential, but Johnson said that there were some instances where purchasing clothes could be defined as necessary.
"At some point in people's lives, clothing isn't a want it's a need - newborn baby's clothes, or new school shoes - I think especially some of the value retailers are able to provide that at such a good price you do start to ask, actually, is there a need for some of these retailers to have stayed open," the Birmingham City University lecturer said.
Looking ahead to the chancellor's spring budget, Johnson said that support for smaller retailers who have been unable to build their online presence amid the ongoing pandemic was vital, adding that the furlough scheme has been "absolutely fantastic" for firms to help them stay afloat during the health crisis.
The growing popularity of online shopping even before the pandemic has been blamed for the disappearance of several historic brands, including Woolworths, Littlewoods, and British Home Stores, from UK town centers. The latest big name to topple was Arcadia Group, which entered administration this past November.
Online newcomers ASOS and Boohoo swooped in to purchase Arcadia's brands, which included Topshop and Debenhams, and their inventory, and while some commentators placed the blame on COVID-19 for the group's collapse, Johnson said that Arcadia had been ailing long before the start of the pandemic.
"They've got left behind, they've just completely got left behind. They've not shown any innovation, any movement," Johnson said, adding that the COVID-19 pandemic had "accelerated" but not caused Arcadia's decline.
The Birmingham City University academic added that she hoped consumers would back smaller, independent brands once non-essential retailers open their doors.
Commenting on the prime minister's roadmap to exit the third national lockdown, Rosie Axford, founder of the London-based interior design brand Wicklewood, said that it was vital the social distancing restrictions were eased at the appropriate time to ensure that shops would not be required to shut their doors again.
"Truth be told, we would prefer to wait another six weeks and be able to open up our shop for good than keep having to backtrack and it makes staffing incredibly hard," Axford said in a statement to Sputnik.
The Wicklewood founder added that the decision to reopen non-essential retail outlets at the same time as hospitality venues was a logical step to increase footfall.
"We also need to ensure consumers are encouraged to go to the shops otherwise it is pointless, so it makes sense to open non-essential retail at the same time as other leisure activities," Axford remarked.
As England comes out of its third national lockdown, with hopes that the rapid pace of the country's mass vaccination program will mean that nationwide social distancing measures will not have to be enforced again, retail outlets and hospitality venues are banking on growth in consumer confidence and continued government support.
All eyes will be on the House of Commons on March 3, when Rishi Sunak presents his spring budget to parliament. According to UK media outlets, the chancellor is expected to announce billions of pounds in additional spending, including an extension to the furlough scheme, to keep businesses afloat and stave off a spike in unemployment.