Earlier this week, I attended a CMS Webinar titled “Open(ish) for Business: lessons learned one week into retail’s reopening”. It was a review by Stephen Scott (partner), Laura Cole (associate) and Rebecca Hilditch (associate) of the CMS real estate team of the reopening of the retail sector in England. What is immediately interesting is that Scotland is currently a few weeks behind England in terms of the lockdown road map, so it was beneficial to anticipate how Scotland may progress once retail starts to reopen.
Retail and the pandemic so far
The webinar started with some interesting statistics on the impact on the retail sector:
- Retail and recreational activity has fallen by 68% (Deloitte)
- A negative growth of -1.5% in Q1 with an expected GDP fall by -5.1% -> this would be the largest fall in a century (JLL)
- Online sales have spiked by 18% and is expected to have spiked 30% by 2030 (JLL)
It will be interesting to see how the retail sector recovers and continues to adapt over the next few years!
Lessons from abroad
I really enjoyed this next part of the webinar which compared different countries’ data in regards to mobility trends and footfall, as countries ease their lockdown rules. Check out these data graphs:
What can be gleaned from the data is that there is generally a recovery rate of about 80% of pre-COVID levels. France seems to be recovering well, despite easing its lockdown measures later than that of Austria, for example. On the other hand, footfall in the USA is comparably slower in recovering and the speakers credited this to a lack of consumer confidence!
The UK position – one week into retail’s reopening and what to expect
As England opens up the retail sector, here is a summary of some of the points (about England and other countries) that I found interesting:
- Since the UK move to working-from-home, there has been a growth towards consumers sourcing locally produced goods (Savills)
- 46% of consumers suggested that they are motivated to support local businesses
- Restaurant Industry News on 3rd June 2020 reported that it will take the food and beverage sector until June 2021 to return to profit
- Cinemas are planning to stagger their screening times and reduce capacity
- Interestingly, Hong Kong has opened its gyms but with glass screens between the equipment
- There is a greater emphasis on PPE in the personal services industry
Unfortunately, there have also been some insolvencies over the pandemic in the UK:
- Debenhams
- Oasis
- Laura Ashley
- Warehouse
- Victoria’s Secret
- Poundstretcher
In addition, the USA expects 20,000 stores to close in 2020, compared with the 9,000 that closed in 2019. Of this number, around 55-60% will be in shopping centres.
Moving forward post-pandemic
In England, the social distancing distance has been relaxed from 2 metres to “1 metre plus” (at the time of writing). Currently, different countries have different rules on social distancing:
- 1 metre: China, Denmark, Hong Kong, Lithuania and Singapore
- 1.4 metres: South Korea
- 1.5 metres: Australia, Belgium, Germany, Greece, Italy, Netherlands and Portugal
- 1.8 metres: USA
- 2 metres: Canada, Spain and Scotland
For UK hospitality sector, a social distance of 2 metres would achieve 30% of normal revenues whilst a distance of 1 metre would generate about 65-70% of normal revenues. It will be interesting to keep up with this data to see whether Scotland follows with reducing the social distancing distance from 2 metres as it eases its lockdown measures.
Takeaway
I really enjoyed this insightful webinar which not only gave us facts and figures of the UK but that of countries for comparison. Although there is of course uncertainty globally, the UK can take some comfort and learn from other countries who are further ahead in opening up their economy. It will most certainly be worth keeping an eye on the Scottish lockdown measures and comparing this to England when more data is available!
