Yahoo Finance Retailers suffer London sales pain as new lockdown looms
Three of Britain’s biggest retailers today laid bare the devastation wrought by the Covid crisis on London trading, giving rise to fresh fears about the impact of a potential second lockdown of the capital.
Bakery chain Greggs, bookseller Waterstones and chocolatier Hotel Chocolat said trading in central London and other city centre locations remains severely depressed compared with suburban and out-of-town locations.
There are growing concerns that a potential London lockdown could further damage trade for non-essential retailers still recovering from three months of forced closure in spring.
Greggs chief executive Roger Whiteside said: “London is already one of the most affected areas with people now travelling in less. If there were then a lockdown to take that actually even lower you might find some London shops are simply not worth opening.”
He added: “It would have to get really bad before we decided to permanently close shops in London because they were strong stores before.”
Greggs today reported same-store sales in the 12 weeks to September 26 are now 71.2% of 2019 levels. Whiteside said that stores took a hit from the Eat Out to Help Out scheme in August, which tempted customers to rivals. The warm weather also dented sales. The company, which employs 25,000, has kicked off a consultation with its staff to shorten their working hours which will conclude in November.
Hotel Chocolat said impulse purchases were down significantly due to lower footfall, particularly in central London, and that five stores in “commuter” locations remain temporarily shut. Boss Angus Thirlwell said: “There has been literally zero footfall in some locations like big stations and we have got a store in an office-y area, Chancery Lane, and one on The Strand where there are no theatregoers. We are desperate to get them open.”
Thirlwell said he is in “constructive discussions” about temporary rent cuts with landlords. He added that if London went into lockdown again it would switch to ramping up online deliveries.
The chain slumped into the red for the year to June 28 — making a £6.5 million loss compared with a £10.9 million profit a year earlier. Searches online for Christmas ranges are up 1000% week on week as customers shop earlier to ensure they are not hit by Covid disruption.
Waterstones boss James Daunt said all of its shops have reopened nationwide except on Leadenhall in the City “which was not worth reopening”. Its store in Covent Garden reopened after lockdown but footfall was low, so it was shut before reopening again.
A lack of tourists is hurting city centre stores, including in London. He said: “We feel that customers are definitely coming back. Every day is getting steadily better apart from particularly badly hit areas — the West End is 60/70% down. Trading in suburban areas is much better that city centres.”
Daunt said the book industry has enjoyed “double rations” as the delay to the publication of some titles builds towards a promising Christmas.
Asked about redundancies, he said: “Traditionally we hire lots of part-time people in the winter months so we can kick that can down the road and make a decision on jobs when we see where we are in February or March.”
Daunt said independent booksellers face the biggest headaches and the Government needed to help level the playing field between stores and online retailers by adjusting business rates.
Non-essential stores had to close during lockdown, but industry sources believe this is unlikely to happen again as shops are now Covid-secure.
The New West End Company estimates that the crisis risks £5 billion loss in sales, putting over 50,000 jobs under threat long-term.