Footfall at UK Retailers Remains Weak After lifting of Second Lockdown

Summary

• Footfall across High Street retail establishments in the UK registered an 87 per cent jump on 2 December compared to the same day the previous week after the second lockdown was removed,
• The footfall was still 26 per cent lower compared to the same day previous year.
• Several retailers across the country are offering big discounts to clear the stock unsold during the year.
• The UK is all set to start its Covid-19 vaccination process from the second week of December, which could give a major boost to shoppers just ahead of Christmas.

The Wild Wednesday, 3 December, just after the second lockdown was lifted did not see much cheer among the retailers in the United Kingdom despite the upcoming festive season. Though the footfall across high street stores, shopping centres and retail parks were higher by 87 per cent over the last week, it was still 26 per cent lower compared to the same day previous year.

Clearly people are taking the infection warning seriously and are sceptical about stepping out of their houses. The UK government has implemented a tiered system of restrictions, where shops and service have been divided into three tiers. The outcome of this system will be reviewed on 16 December; changes will be announced on 17 December, which will be implemented from 19 December.

For Christmas, the UK government has decided to relax the rules for five days where up to three families can form a bubble and enjoy the festivities.

Second lockdown

The second lockdown was far less restrictive than the March lockdown. Though most of the retail establishments did not completely shut down, but they had strict restrictions on what can be sold and how many people can enter an establishment at a time.

The second lockdown allowed most retailers to make some revenues and engage their employees, but the regulations restricted them from functioning fully.

November is the most important time for businesses across the world. Now, December marks the peak festive season when maximum shopping takes place, particularly starting from Black Friday till the days prior to Christmas. Now that Black Friday and Wild Wednesday are gone, the retail sector has all their hopes pinned on the days to Christmas.

Overall pandemic impact

The coronavirus pandemic has had a devastating impact on the retail sector around the world. In the UK, several retail companies were forced to go into bankruptcy proceedings, and several others were forced to scale down their businesses. Several thousands of people employed in the sector were laid off, and others are counting their days.

The fall of the traditional retailing industry, however, has come as a boon for the online retail industry which grew exponentially ever since the lockdown was imposed in March. Most people who were forced to stay indoors took to online shopping to buy things for daily needs, which led to the massive growth in the sector.

Many of the large and medium sized traditional retail companies immediately launched their online stores or expanded their existing ones seeing the sudden demand in the market. These companies have been faring relatively well over the months since the opening of the lockdown.

Retail Sector Post Vaccination

In the post vaccination world, the retail sector is expected to experience a strong recovery. As most people have spent their time indoors, they would definitely venture out and shop at centres, supermarkets and high street stores. The pent-up demand of the whole year will also have an impact on the consumption level. Both online retailing as well as the traditional shop floor can expect a major boom in 2021.

In the long run, however, most experts believe that the retail sector’s recovery will be very bright, though the online segment will see stronger growth than the traditional, physical stores.

Let us have a look at the stock performance of top five retailing companies in UK over the past one month.

Tesco plc (LON: TSCO)

The shares of Tesco plc were at GBX 229.80 per share as on 4 December 2020, (10:54 AM GMT+1), up by around 0.53 per cent over the previous day’s close.

Marks & Spencer Group plc (LON: MKS)

The shares of Marks & Spencer Group plc were at GBX 145.10 per share as on 4 December 2020, (10:56 AM GMT+1) gaining 2.18 per cent over the previous day’s close.

Ocado Group plc (LON: OCDO)

The shares of Ocado Group plc at GBX 2,228.00 per share as on 4 December 2020, (10:57 AM GMT+1) lower by 0.05 per cent over the previous day’s close.

J Sainsbury plc (LON: SBRY)

The shares of J Sainsbury plc were trading at GBX 218.70 per share as on 4 December 2020, (10:58 AM GMT+1) gaining 0.05 per cent over the previous day’s close.

WM Morrison Supermarkets plc (LON:MRW)

The shares of WM Morrison Supermarkets plc were trading at GBX 179.75 per share as on 3 December 2020, (10:59 AM GMT+1) higher by 0.79 per cent over the previous day’s close.