The ‘Freedom Day’ delay has further staggered Retail’s full restart and, despite positive indicators of pent-up demand during trading in May, it can’t come soon enough for the sector to be able to fire on all cylinders.
However, with footfall down by more than a quarter in May, compared to 2019’s data for the same month, it’s clear that not all consumers are returning to “normal” when given half a chance.
COVID-19 has shaped a new consumer landscape that will alter the retail landscape moving forward, from channel shifts to significant health and safety or financial concerns. The need for industry transformation to respond to this period of intense disruption is critical for long-term survival.
With the challenge to stimulate customer demand in one hand, on the other lies the sizeable issue of liquidity management. Despite the recent extension of the rent moratorium in the UK, as government support begins to taper down, retailers are faced with a number of fierce financial headwinds. Unprecedented UK-wide public borrowing levels of £75 billion and a further estimated £7 billion outstanding in unpaid rent for commercial property, immediate cash levers are providing temporary relief only.
Retail leaders must ramp up their transformation efforts to be well positioned to profit from any improvements in the economic outlook, assessing a range of measures to establish a surer footing for the future.
For more details, see our H1 2021 retail snapshot here.