Thousands of shops and restaurants ‘will collapse’ if government bailouts are withdrawn when coronavirus lockdown is loosened, warns the British Retail Consortium
- Fears cost of adhering to social distancing rules could threaten future of firms
- Ministers are being urged to keep in place bailouts after lockdown is eased off
- Industry believes failure to maintain support could lead to thousands of closures
- Here’s how to help people impacted by Covid-19
Chancellor Rishi Sunak is under growing pressure to commit to keeping business bailouts in place beyond the end of the coronavirus lockdown amid fears the cost of adapting to the ‘new normal’ could see thousands of firms close.
The government has made billions of pounds of financial support available to small, medium and large companies to try to keep them afloat during the current crisis.
But as ministers begin to plan for how restrictions could be lifted in the coming months they are being warned businesses will need financial assistance long into the future.
Some elements of social distancing are expected to remain in place even when lockdown is loosened.
Businesses have stressed that changing to a new way of working will see many placed under financial strain and they will need help to stop them going under.
Chancellor Rishi Sunak, pictured in Number 10 on April 8, has been told businesses will need financial support from the government after lockdown ends
Members of the public shelter under umbrellas as they queue outside a branch of B&Q in south London today
The British Retail Consortium has warned of the future difficulties facing firms as they try to get back up and running.
Tom Ironside, the director of business and regulation at the BRC, told The Times: ‘Firms face high costs to implement social distancing measures coupled with lower footfall and there are questions about the speed and extent of any recovery in consumer demand.’
He added: ‘It is essential that the government doesn’t move too quickly to withdraw vitally important support once any relaxation begins.’
The BRC has published a set of recommendations setting out how businesses could reopen.
Recommendations include limiting entry and exit points into shops and capping the number of people allowed in at any one time.
Installation of cleaning stations at the front of shops so that customers can use hand sanitiser and disinfectant wipes has also been suggested as well as the use of strict one way systems.
The government has suggested the nation will need to adapt to a ‘new normal’ after lockdown with social distancing likely to be a fixture of everyday life until a way is found to neutralise the virus.
But there are particular concerns about what that will mean for the hospitality sector, especially restaurants and pubs, which is reliant on people socialising.
The UK Hospitality industry body has warned an ‘extended period of social distancing will mean that many hospitality businesses will not be able to operate fully, and many will not be able to open at all’.
It came as retailers reported a steep drop in sales in the year to April, with figures matching the decline seen in December 2008 after the financial crash.
New statistics published by the CBI show the joint sharpest fall in sales since the business group started the survey in July 1983.
The survey found more than two thirds of businesses have seen a significant negative impact on domestic sales because of coronavirus.
Some 39 per cent of retailers have reported a total shutdown of their UK activity because of the disease.
The British Retail Consortium has recommended that all shops should impose social distancing queueing systems when they reopen. Pictured is a queue at a B&Q in Edinburgh on Sunday
And 44 per cent of firms have furloughed workers while eight per cent have made some staff redundant.
Rain Newton-Smith, CBI chief economist, said: ‘It’s no surprise that the lockdown is hitting retailers hard. Two fifths have shut up shop completely for now. And sales of groceries and other essentials also fell, suggesting households may have been dipping into stockpiles built up prior to the lockdown or tightening their belts more generally as incomes take a hit.
‘Although the livelihoods of hundreds of thousands of employees in retail remain at risk, there are encouraging signs that the Government’s Job Retention Scheme is providing genuine relief, with many opting for temporary rather than permanent lay-offs.
‘Continued support for retailers to cover their fixed costs will be vital for ensuring that businesses are able to re-open when it’s safe and appropriate to do so.’