As the coronavirus continues to spread across the world, its impacts are being felt everywhere. In every industry, new challenges and hardships have presented themselves over the last few months, putting many into highly precarious positions. In the retail sector especially, there have been considerable difficulties. Though non-essential shops have started to return from lockdown and the hospitality sector has been given the go-ahead, the ever-looming threat of the disease is likely to continue causing problems for these kinds of businesses.
Measures against the virus will likely be in place for a long time so many retailers will have to continue to adapt to the shifting needs of their remote customers and find innovative ways to keep delivering or risk extinction. From rent troubles to social distancing, the worries of the retail industry are also more pronounced for small business owners who could be the hardest hit by this virus.
Opening the doors is only the first step
Though non-essential shops have opened again and pubs, restaurants and hair salons have been working tirelessly to set out new layouts and PPE protections for customers, hard times will not yet be over for British businesses. Many office workers will still be working from home full-time and though people who have been self-isolating for almost three months will welcome the opportunity to go out, the virus is still very much present in the UK. In addition, the good weather seems to have ended, restricting the number of opportunities for businesses to host customers outside.
With two quarters of the year having passed and therefore two commercial rent deadlines, small business owners will be feeling the pressure to generate income as quickly as possible. While applications are still pouring in for the Coronavirus Business Interruption Loan Scheme, exceeding 100,000 at the end of June, the approval rate of this scheme sits at around 50%. Though more opportunities to make money are now available for businesses allowed to reopen, more will need to be done to keep many small businesses from the brink of disaster.
Death of the high street?
Retailers, cafes and restaurateurs have made a shift towards online-only and delivery-based services in huge numbers to keep businesses afloat and money coming in. During this period, many retailers have opted to quickly shift their business offerings by taking advantage of platforms like Amazon, Ebay, JustEat and Deliveroo. While these sites offer a quick and established way to reach customers for those companies without an internet presence, this also means that retailers will now have to pay hosting fees to these sites. For businesses working to small margins, this could cost more than it makes. Therefore, while it is a good strategy of keeping a customer base engaged, many will already be aware that this is unsustainable.
There has been a considerable level of innovation shown by small businesses to quickly pivot their offerings and maintain a customer base and an income stream while physical shopping has been out of the question. Going forward, most businesses must maintain both a physical and an online presence to ensure they are serving as wide a customer base as possible. The limits to the number of customers in-store at any given time and restrictions such as closed changing rooms will mean that the customer journey is more challenging, increasing the chances of losing sales.
Is this the end of lockdown?
However, following this extended period of isolation, separated from our consumer habits, there is already evidence that we are still happy to walk up the high street for what we want. Long lines outside of Primark and Sports Direct on their reopening days shows that the internet hasn’t completely won the nation over yet. Additionally, a recent survey found that a third of Brits said they would use their local, independent shops more once lockdown was lifted. Many of us witnessing the effects of the Covid lockdown on our neighbouring businesses will have a renewed respect for their existence which will hopefully buoy them up over the next few months enough to keep their physical stores open.
However, as has been shown in Leicester, local lockdowns are a troubling reality. For SMEs everywhere, the potential for a further lockdown after dedicating even more time and money into repurposing shop floors and kick starting business after such an extended period will not be a pleasant thought. Though big-name businesses like Boots are still withholding rent despite being open throughout the pandemic, this is likely not an option for most small businesses and local lockdowns will only exacerbate the problem.
So far, 2020 has been a highly precarious year for those in the retail and hospitality sectors. Many boutique store owners will be feeling the pressure in these first weeks emerging from the UK’s lockdown. The ‘new normal’ will likely be dividing services between in-store and online delivery/takeaway until the threat of the virus is meaningfully minimised across the country. In addition, the government will need to ensure that, for the sake of business owners and the owners of commercial property, there are further protections in place for businesses in areas that are forced to enter local lockdowns.
Ben Fielding is from Inventory Base, the UK’s leading inventory property software.