Retailers on a knife edge as scientists criticise government ahead of reopening

Sales figures put out by the British Retail Consortium and Barclaycard were grim – but not as bad as the previous month, writes James Moore

Britain’s shuttered high streets are set to reopen on 15 June. But will shoppers return? (AFP/Getty)

May was another grim month for the retail sector, at least on the face of it.

The British Retail Consortium (BRC), its trade body, said sales were down 5.9 per cent. On the same day, Barclaycard reported a 26.7 per cent decline in retail transactions.

It should be noted that the two sets of figures cover different slightly different periods – the BRC’s runs from 3 May to 30 May, Barclaycard from 25 April 2020 to 22 May – which may partly explain why Barclaycard’s data looks so much worse at a time when card-based transactions have risen.

While the word “awful” is entirely appropriate for both, it nonetheless should be noted that neither was as bad as April’s data. Barclaycard showed a 36.5 per cent decline and the BRC a 19.1 per cent fall during that month, the steepest decline seen in either dataset.

The BRC also produced a “like for like” sales figure for May, which excludes temporarily shuttered stores. It showed a 7.9 per cent increase, driven almost entirely by online shopping.

Barclaycard, meanwhile, noted a smaller decline in “non essential” sectors than during the previous month.

Glimmers of hope? Reasons to feel cautiously optimistic ahead of the official reopening date slated for 15 June?

Up to a point.

The government may say it’s safe for consumers to go out and spend so long as they continue to observe social distancing after that date. Whether consumers choose to believe that is an open question.

Those who irresponsibly flocked to Britain’s beaches during the bank holiday may. Even some of those who didn’t are desperate to get out. For others, caution will continue to be the watchword.

It’s worth noting that many Britons chose to lock themselves down before the government officially instructed everyone apart from senior adviser Dominic Cummings to stay home. The behaviour of Boris Johnson’s arrogant svengali has shaken the public’s faith in the government’s pronouncements.

The independent Sage group of eminent scientists has also lambasted its test, track and trace system, designed to contain the virus, as “not fit for purpose” while calling for a new approach.

Britain may not recover economically from the Covid-19 without it. The risks of a second wave are all too real.

Barclaycard found just 20 per cent of UK adults feel positive about the economy, which will also serve to rein in spending, at a time of job losses, wage cuts and furloughs.

The BRC has correctly stressed the importance of safety in its statements pertaining to the reopening, and has issued guidance to its members with that aim in mind.

It commendably involved shop workers’ union Usdaw and made its report available to non-members too.

Quite a contrast to the government’s bluster, spin and airy dismissal of independent voices.

The BRC, and the majority of its members, are all too well aware of the importance of confidence if the green shoots discernible amid the bleak numbers are to stand any chance of flowering.

“Not out of the woods,” is how it described the sector.

That’s indeed the case. The road back will be long and bumpy in a best case scenario. Famous old names have been vanishing from the high street over the past few years as online shopping has boomed and Amazon has eaten up an ever greater proportion of the consumer’s pound.

The BRC says that if government support is withdrawn too quickly, more shops and businesses will not survive. Even if ministers heed its call, some of its members are probably doomed.

Top of its wish list is support on rents. Negotiations between retailers and landlords are going to be fraught indeed.

It shouldn’t be forgotten that the latter are also caught between a rock and a hard place. In many cases their finances are shaky too. Cutting rents may doom them. But if they don’t cut, they may lose their tenants anyway.