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Pent-up demand brings shoppers back to cities but hospitality left out of the party

Written by on 02/12/2020

If Debenhams had been as popular before COVID as it looked when reopening after lockdown it might not be heading for liquidation.

But a month stuck at home and a closing-down sale sharpens the appetite for a bargain, so shoppers had to be counted in and out of the Oxford Street store by some of the 12,000 staff likely to lose their jobs.

The scenes in London were repeated at branches in Birmingham and Liverpool as shoppers in England returned for what retailers hope will be a belated Christmas rush.

Birmingham shops reopen 2/12/2020 Primark
Image: There were signs of pent-up demand

But just as Debenhams will not be saved by a flurry of shoppers picking over the carcass of its broken business, so UK retail and the wider economy will not be rescued by a three-week splurge.

In a triumph of empty marketing over reality, some had tried to bill the end of lockdown as “Wild Wednesday”, and at first sight city centres did look busy.

But like the slogan, that impression was superficial.

Overall footfall in England was down 22% on the same day last year, and in high streets and city centres it was down by a third.

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In regional cities it was worse, down 45%, while the West End of London saw 63% fewer people than a year ago.

The one brighter spot in the figures was out-of-town retail parks, which saw on average just 4% fewer customers, supporting the theory that many feel more secure shopping where they can drive, rather than relying on public transport.

Birmingham restaurant closed as tier system starts 2/12/20
Image: The hospitality sector is exasperated by continued closures

Even if retail were to recover completely whole sectors remain closed by state order, including the arts, events and most obviously hospitality businesses – shuttered, or as good as, in the vast majority of England subject to Tier 2 and Tier 3 regulations.

The ban on non-household mixing indoors in Tier 2 is hobbling many businesses, and the shutdown of any bar and restaurant in Tier 3 will finish others off.

The industry is close to open revolt, exasperated by a lack of evidence to support the case that it is major source of infection, and legal challenges are being brought.

Sam Morgan, proprietor of Craft in Birmingham, is bringing a judicial review backed by more than 250 businesses in the city.

“The government have got a moral and legal obligation to ensure that they’re protected,” he said.

“Now, I appreciate they may say that they have protected us.

Shoppers queue outside Debenhams as it reopens after England's lockdown - a day after it revealed it was winding down 2/12/2020
Image: There were queues outside Debenhams in Oxford Street

“But with the greatest respect in the world, the current £3,000 grant is on average only 15% of the central overheads that our business has on a month to month basis and as such, that is just not acceptable.”

The West Midlands mayor Andy Street is also campaigning for more support for hospitality and has written to the chancellor asking him to increase grants immediately for businesses he has shut down.

“It looks as though there’s pent up demand that people have come into the city for that today,” he told Sky News.

“But there is another sector of course it’s not been able to open. That’s hospitality.

“We’re a Tier 3 area. They are completely closed. This is their peak period.

“So we’ve started the discussion again about further support from government for that sector.

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“There are two particular things we’ve asked for. The first is cash.

“Now, because actually there’s a £3,000 pound grant for most hospitality businesses, when you think of the takings in this Christmas period, that does not equate.

“Then there are things like extending the VAT cut and extending the business rates holidays, that will help this sector, which employs 135,000 people across the West Midlands, recover and demonstrate viability.”

Without the return of hospitality and those other industries still effectively locked down, economic recovery can only be partial.

All will rely on consumer confidence returning once restrictions are eased, which makes approval of the Pfizer-BioNTech vaccine the only genuine reason to go wild.

 Sky News

© Sky News 2020

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