English pubs can open again but 2,000 have already gone under
London(CNN Business) Shops, gyms, pubs and beauty salons in England have welcomed back customers after three months of lockdown, delivering a crucial boost to retail and hospitality businesses that have been forced to close repeatedly during the pandemic.
Shoppers braved unseasonably cold temperatures as they lined up outside stores in cities on Monday after restrictions on non-essential retail and outdoor hospitality venues were eased.
Stores and pubs have been closed since early January, when England went into a third strict national lockdown to combat a surge in coronavirus cases. The restrictions and a vaccination drive have been credited with sharply reducing the number of new cases and deaths across the United Kingdom.
Brits are expected to flock to shops and pubs for haircuts and pints of beer, but the surge in demand may be little consolation to businesses that were rocked last year by the United Kingdom's worst recession in three centuries. And for some, the relaxation comes too late.
The Forum for British Pubs estimates that at least 2,000 pubs have shut permanently over the past year. Many other retailers have also closed their doors for good despite government programs aimed at helping businesses during the pandemic.
UK stores have missed out on roughly £30 billion ($41.2 billion) in lost sales during the country's three lockdowns, according to the British Retail Consortium, which estimates that 67,000 retail jobs were lost between December 2019 and 2020.
"Retailers are excited about welcoming back their customers," Helen Dickinson, CEO the British Retail Consortium, said in a statement. "While we expect an initial surge in spending when shops first open, the real test will be how this holds up."
Many restrictions remain in place. Pubs, for example, are only allowed to serve customers sitting at tables outdoors. Brits may be willing to brave freezing temperatures for a pint, but the British Beer and Pub Association estimates that only 40% of pubs will reopen on Monday because they don't have sufficient outdoor space. Under the government's plans, indoor hospitality will be allowed no earlier than May 17.
Laine Pub Company CEO Gavin George said he's fortunate that most of his 55 pubs have outdoor areas. George has spent about £250,000 ($344,000) to make those spaces warmer and more comfortable, but even that won't attract enough customers.
"For a pub to trade profitably, it needs to be able to trade inside and outside without restriction. So I'm very keen for the government to stick to its recovery plan," he said.
Kate Nicholls, the CEO of industry group UK Hospitality, told CNN Business that continued social distancing restrictions mean that businesses that open will only be able to make 60% of their usual sales until the lockdown ends completely, which won't happen before June 21.
"We will sadly lose many businesses and it's going to be a long road to recovery. Those that are reopening are going to have heavy levels of debt. It's going to be 18 months before we get back to pre pandemic levels of profit and revenue," she added.
According to PwC research compiled by the Local Data Company, 17,532 shops closed last year in the United Kingdom, while only 7,655 opened. Many more stores that "temporarily closed" during lockdowns may never return, the consultancy warned last month.
Shops that do survive will need to hire staff, resume rent payments and adhere to new safety requirements while grappling with a shift to online shopping and changing consumer patterns as many people continue to work from home.
"Government roadmaps across various parts of the United Kingdom are set to reactivate the high street. But it's going to look very different post-Covid as businesses will have to weather the twin impacts of permanently changed shopping and working environments," Zelf Hussain, retail restructuring partner at PwC, said in a statement last month.
— Chris Liakos, Anna Stewart and Will Godley contributed reporting.
