THE spectre of further coronavirus restrictions has loomed large for Scotland’s businesses in recent weeks. As the number of infected patients rises the inevitability of new rules and regulations has been apparent to anyone following the First Minister’s regular briefings.
That awareness doesn’t mean retailers will have seen last week’s announcements with anything other than dread. While the new retail-specific restriction are relatively limited – most retailers never stopped maintaining two-metre physical distancing – the consequence of shutting down hospitality and the night-time economy further reduces the reasons for people to visit town and city centres.
As the autumn nights lengthen the gloom is descending on retail. Footfall to city centres and consumer spending are both down on last year. Alongside coronavirus restrictions there is the oncoming challenge presented by the end of EU transition.
Other public policy isn’t helping either. UK ministers are ending tax-free shopping for international visitors – reducing the reasons for tourists to visit and spend. The Scottish Government is considering trade union calls to ban shops from trading on New Year’s Day.
All this sets the tone for the most important Christmas trading period in memory. One-third of annual shopping takes place in the final three months every year – the so-called golden quarter for retailers – determining whether the year is profitable or not.
This year the stakes are even higher. Tens of thousands of retail jobs have been lost. More are at risk if trading doesn’t improve. The cumulative burden facing the industry of ever-higher costs, regulations and taxes is running straight into the economic downturn from coronavirus. That brutal combination is putting viable businesses on the edge.
Even without the market pressures, the operational challenges this year will be breathtaking. Online sales are now a much greater proportion of sales – yet the infrastructure for this is often new, and about to be tested to the maximum. In-store it could be challenging to maintain two-metre physical distancing during peak Christmas trading hours – as anyone who has tried to do last-minute shopping will testify.
It’s an array of challenges. Yet retailers are not despondent.
Within those challenges there are opportunities. Consumers who haven’t had to commute for months may have a little extra disposable income for Christmas presents. With so few opportunities for us all to meet loved ones festive feasts at home provide an opportunity to make up for lost time. With any luck a few of us will look at our wardrobes and think perhaps something a little smarter than a hoodie might be nice for the holiday season.
Savvy consumers will already be scouting for the right gifts and bringing forward some of the costs of the season – and, of course, by shopping early they won’t risk missing out or be forced to queue outside in the Scottish winter.
Retailers will also hope for some support from Government. Crucially, shops need to be open to benefit from Christmas trade. Closing down shops in November and December would be catastrophic for high streets, and unnecessary. There is no evidence shops are a source of infection.
There also must be recognition that this Covid hangover won’t end for retail in a month or two. The costs of operating during this crisis are immense and few retailers are currently profitable – even including the 100 per cent rates relief this year.
If the Scottish Government wants to provide its own Christmas gift to the industry, then announcing there will be no immediate return to full business rates liability in this year’s Budget would be the perfect present for our beleaguered sector.
David Lonsdale is director of the Scottish Retail Consortium
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