How will the ending of the Government’s Coronavirus Job Retention Scheme affect independent retailers?
The furlough scheme, which was extended in March until the end of September, cost the government around £66 billion in total and protected more than 11 million jobs across all sectors since it was first implemented last year.
While the independent store market returned to growth for the first time since 2017, the worry now is that independent retailers with staff on furlough may find they cannot afford to keep them on – leading to fears that retail unemployment could rise, leaving consumers with less disposable income to spend on luxury goods – ultimately leading to an increase in store closures.
The first six months of 2021 saw the independent store market return to growth (a net change of +804) for the first time since 2017, according to Local Data Company’s (LDC) analysis of independent retail store openings and closures. LDC said government support such as the furlough scheme, the rent moratorium and business rates relief helped the sector.
Lucy Stainton, commercial director at the Local Data Company, said: “For the first time since the onset of the pandemic, there may be some cause for optimism when it comes to the performance of our high streets. The latest LDC figures show a slowdown in the speed of decline, with store losses far more significant in the first half of 2020 when compared to 2021. Interestingly, the independent sector has returned to growth for the first time since 2017 as the number of closures dropped and openings have steadily increased year on year, boosting the overall figures.
“We can attribute this improved performance to a few things; the success of government support schemes which will remain in place until March 2022; the growing appetite for categories such as take away food and convenience stores, boosted by several lockdowns, and a consumer which is increasingly concerned with the provenance of products, sustainability and supporting local businesses. Independent operators are also benefitting from the volume of available units, many of which come with attractive deals from a new market of shopping centre landlords who are now looking to the independent sector to fill the significant number of stores being vacated by chains.”