After all non-essential stores in the UK were ordered to temporarily close by Prime Minister Boris Johnson a new report from the Centre of Retail Research (CRR) has predicted that over 20,000 of them will never reopen due to the damage caused by the Coronavirus pandemic on retail and consumer spending.
If 20,000 do close that would be a 28% increase in store closures when compared to 2019 and would be a massive blow to retail jobs and embattled landlords.
Despite an increase in temporary employment created by supermarkets working to meet consumer demand, the report, Coronavirus: Lost Lives, Lost Stores and Lost Jobs, forecasts over 235,000 retail jobs will be lost in 2020 through this level of store closures – a 64% increase in retail job losses on 2019.
Joshua Bamfield, director at CRR, said: “We expect large retail businesses to now be looking at exactly how many stores they expect to operate in 2021 and beyond in order to trade successfully moving forward. They will now make plans to achieve those objectives.”
For the stores that do remain it’s clear, they’ll be expecting significant rent reductions and improved terms in order to keep stores open for the rest of 2020 and beyond, with many predicting Coronavirus will further increase the speed of online shopping adoption across society.
This impact is already being felt by the shopping center group, Intu, who have just announced that they have only been paid a little over 30% of the rents owed, by its tenants for the forthcoming quarterly rents.
Primark said last week that closing all stores will cost it £650m a month in lost sales. Unlike most retailers, the business has no online trade to fall back on and has no e-commerce presence.
The likes of Matalan, Debenhams, Arcadia, Burger King, and Superdry have all also announced they’re looking for rent payment holidays from their landlords due to the current closure of all their stores and clothes shopping in the UK being an online-only option for an indefinite period of time.
Whilst it’s too early to say Coronavirus could sadly end up being the pinnacle of the retail apocalypse that has been predicted in recent years, personally I prefer to remain optimistic and hope it’s actually the catalyst for much needed change in the retailer/landlord relationship.