Second lockdown: How are indie retailers faring?

Millions more people will enter lockdown from Friday as areas across western and central Scotland are placed under stricter restrictions. The new rules mean more of the UK’s non-essential shops and hospitality venues will shut until mid-December – and the FSB in Scotland has warned that it will disproportionately affect SMEs.

“The cards are now stacked against Scottish smaller businesses, and that’s why we’ve got to see people support their local firms as they grapple with these restrictions,” said Andrew McRae, FSB’s Scotland policy chair.

But how have other areas of the UK been coping with lockdowns in recent weeks? Data published earlier this week by Springboard painted a relatively positive picture. While footfall across the UK was more than 50% lower than the same week in 2019 thanks to Covid-19, it was found to be more resilient than in the first lockdown.

Between the 12th-14th November, footfall in retail destinations rose by an average of 13% week-on-week, indicating that rather than restricting their movement outside of their homes, shoppers were starting to return to retail destinations.

Diane Wehrle, Springboard’s insight director said the first complete week of England’s second lockdown “wasn’t nearly as severe as it was in Lockdown 1 or indeed as comprehensive”.

This was partly due to schools remaining open, she said, but also because of the timing of the lockdown. “The fact that footfall is more resilient may well be a function of the proximity of Christmas, and the concern of shoppers to buy well in advance this year to avoid queues, facilitated by the wide range of non-food products offered in stores selling essential goods.”

Coastal towns, historic towns and market towns also generally fared better than central London and regional cities in terms of year-on-year change in footfall, according to Springboard’s data.

In Wales, which had just emerged from a two-week, firebreak lockdown, footfall skyrocketed. The “unprecedented increase” in footfall was 136% higher than the previous week. This could give retailers an idea of how shoppers are likely to react once lockdown measures elsewhere in the UK end.

The second lockdown has also been kinder to the hospitality industry. New data from Lumina Intelligence showed that more hospitality venues remained open during the second lockdown by offering takeaway or delivery services. In March, only 19% of branded operators stayed open. Now, 64% in England remain open, the Operator Data Index showed, with cafés, bakeries, dessert parlours and restaurants managing to keep business going by providing takeaway or click-and-collect services.

“Innovation and creativity is at the heart of the hospitality industry, and these figures prove that,” said Katherine Prowse, insight manager at Lumina Intelligence.

“Difficult winter ahead”

Although businesses are less restricted than during the first lockdown, Suren Thiru, head of economics at the British Chambers of Commerce (BCC) said Britain’s GDP is still likely to contract in the fourth quarter, and warned that the damage to the economy could be “significant”.

“With much of the economy now in a weaker position to withstand periods of extended closure than at the start of the pandemic, the damage to economic activity in the near term may be significant, particularly if restrictions extend beyond 2 December,” Suren said.

“Until a vaccine is rolled out, mass testing remains crucial to getting the economy moving and avoiding further damaging lockdowns. With many firms facing a significant cash crisis, increased grant support for those impacted by restrictions is vital to helping the UK economy weather a difficult winter ahead,” Suren said.

The FSB said UK Transition Vouchers would be one way for the government to help small businesses as they attempt to manage both a new trading relationship with Europe and fresh restrictions linked to Covid-19.

“Record-breaking” month for online shopping

With footfall to brick and mortar shops still much lower than last year, online retail poses a big opportunity to independents. In fact, online sales were up 61% in the first week of November, the highest year-on-year rate since June and fourth-highest this year, according to IMRG, the online retail association.

The rise was attributed to increased shopping due to Christmas and Black Friday, and the announcement of England’s second lockdown at the end of October. “This impressive growth indicates that November is well on track to be a record-breaking month for online retail,” said Justin Opie, managing director of IMRG.

Small businesses can also look to benefit from the data they collect during this challenging period. “Prior to the crisis, research had shown almost half of SMBs had made plans to adapt and transform their organisations for a digital future. Since the pandemic, that desire has now transformed to an inevitable necessity,” said James Don-Carolis, managing director of data firm TrueCue.

James says many businesses fail to make the most of their data. These retailers, he says, will “struggle to make faster and smarter decisions”. However, by improving data and analytics, businesses can generate useful insights, improve forecasting and gain a better understanding of their competitors.

For independents that lack the resources to create their own online platforms, a number of regional initiatives and marketplaces have emerged to give them a welcome boost in the run-up to Christmas. With footfall likely to remain low while widespread lockdowns are in place, indie retailers can make the most of these local shopping campaigns to boost their sales online.

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