High Street giants, John Lewis and Boots, are to cut jobs and close stores as more fallout from the lockdown hits the retail sector.
Boots has said 4,000 jobs will go, about 7 per cent of its workforce and John Lewis is shutting eight stores, putting 1,300 jobs at risk. Boots will make head office cuts and plans to close 48 of its 600-plus optician practices. John Lewis stores in Birmingham and Watford will close, as will its At Home stores in Croydon, Newbury, Swindon and Tamworth and travel sites at Heathrow and London St Pancras.
John Lewis says some of its stores were already struggling before the virus struck, while Boots already had plans for a shake-up. Boots’ ‘essential’ pharmacy shops were allowed to stay open throughout lockdown, but the company said footfall was “dramatically reduced”, with sales down 50% in the third quarter and some 70% at Boots Opticians. Boots is reviewing its entire UK operations and may eventually close up to 200 stores.
John Lewis Partnership chairwoman Sharon White said: “Closing a shop is always incredibly difficult and today’s announcement will come as very sad news to customers and partners. However, we believe closures are necessary to help us secure the sustainability of the partnership – and continue to meet the needs of our customers, however and wherever they want to shop.”
Former John Lewis boss Andy Street, now mayor of the West Midlands, said the closure of the chain’s flagship Birmingham store was “deeply disappointing”, tweeting: “At this stage the closure is only a proposal, and one which I believe risks being a dreadful mistake”. He added that his belief in its potential was “unwavering” and that he would be making the case for it to stay open.
There is an online petition to save the John Lewis’s Watford store which has been signed by thousands of people. The Mayor of Watford, Peter Taylor, said the closure is “incredibly sad news” and his thoughts are with the staff. He also revealed that John Lewis does not pay rent at its Watford store. The closure of the 140-year-old John Lewis store, formerly Trewins, comes a month after Debenhams closed in the town. Intu, which operates Watford’s shopping centre, is also in administration.
Other recent high-profile closures, including Debenhams and Laura Ashley, have rocked the retail sector but they were also on the cards long before coronavirus struck. Some major retail chains in the gifts and greeting card sectors are also known to be struggling and many industry suppliers are owed a lot of money, even as retailers large and small ask for further discounts. Harrods has also been adversely affected and has cut 700 jobs.
Despite the enormous challenges faced by retailers, Chancellor Rishi Sunak did not offer any more help to the sector in his July 8 mini-budget and has warned of a severe recession. Mr Sunak has unveiled some measures he hopes will aid recovery, including a one-off £1,000 payment to employers for every furloughed employee retained to the end of January 2021. In a bid to help the hospitality sector diners will be given 50% off eating out at participating restaurants from Monday to Wednesday in August.
Culture Secretary Oliver Dowden said the moves to support restaurants, pubs and cafes could also help retail, saying: “We very much hope that when people go to their local pub or their restaurant to eat out, those are often in the centre of towns, hopefully that will encourage the footfall to those areas so we get more people going to our shops as well.”
Internet shopping, meanwhile, is booming like never before, a development that is now being mirrored by retail trade exhibitions, which are also having to carve out enhanced online offerings as physical shows are forced to cancel.
Vivienne King, chief executive at Revo, which represents the retail property sector, warned that three million retail jobs remained in jeopardy unless the government undertook “a fundamental review of business rates and direct financial support to underwrite rents”.
