Optimism soars as shoppers return and businesses hope for post-lockdown boom

Ben Chapman
·3-min read
<p>Shoppers on Oxford Street, London, as England takes another step back towards normality with the further easing of lockdown restrictions</p> (PA)

Shoppers on Oxford Street, London, as England takes another step back towards normality with the further easing of lockdown restrictions

(PA)

Optimism among UK businesses is surging as thousands of shops, pubs, restaurants and hairdressers re-opened following the relaxation of Covid restrictions.

Pubs reported overwhelming demand, hairdressers opened from midnight and queues formed outside big-name chains including John Lewis, TKMaxx and Primark.

All businesses re-opening on Monday are vying for a slice of the £180bn in additional savings stashed away by formerly cooped-up consumers since the first lockdown began more than a year ago.

A quarterly poll of finance bosses at Britain's biggest firms by consultancy firm Deloitte reported the highest level of business confidence in 13 years while a separate survey of SMEs found optimism had bounced to heights not reached since 2014.

Sentiment has been buoyed by the raid rollout of the vaccine programme with around 32 million people having had their first shot.

However, optimism was tempered with a note of caution as large numbers of shoppers vowed to wait and see when it comes to returning to the high street.

Three-quarters have vowed to stick to their lockdown spending habits and not dip into their savings, according to research by Zopa Bank.

Julian Metcalfe, chief executive of Itsu restaurants, acknowledged that customers are "a bit nervous" about returning to retail.

"We take it incredibly seriously and we're now in a good position to offer a safe environment," he told BBC Radio 4's Today programme.

A survey of more than 2,100 people by YouGov, commissioned by supply chain experts Manhattan Associates, found that 30 per cent of people do not plan to go back to bricks-and-mortar retailers at all in the immediate future.

Among those, 34 per cent said the dwindling number of shops due to closures of established brands would put them off.

Six in 10 of those who don't plan to go back cited concerns about other sticking to hygiene rules.

Retailers have spent millions making their shops Covid-secure and many were already struggling before the pandemic hit. Hopes are now pinned on the act that virus fears will soon give way to a spending boom that can begin to make up for a brutal 12 months for the sector.

Craig Summers, UK managing director of Manhattan Associates, said retailers would need to adapt their business model to cater for habits that have changed, probably irrevocably.

“Out of adversity comes different ways of thinking and innovation,” he said.

As stores re-open, many retailers will shift to seeing their stores more as “showrooms” containing a small amount of stock that shoppers can try out before ordering for in-store for next-day delivery

“We are always disappointed if we go into a store and something that we wanted isn’t there. If we can change that expectation to be far more like an online experience, people will begin to realise that while something might not be in stock in the colour they like or their size they can still have it next day while at the same time being able to try it out, to touch it and have a look at it.

This will allow retailers to showcase a greater range of goods without having to set aside space for every variety of each product, he said.

While necessity may force retailers to adapt, more traditional businesses also feel they can also enjoy a rebound as lockdown is lifted.

“For millions of customers, browsing in-store is something that can’t be replaced,” said Doug Putman, owner of HMV.

“The British high street has had a tough start to 2021, but as the country slowly gets back to normal, we’re confident that shoppers will return to supporting physical retail.”

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