Retail’s 3 R’s: Reopening, Recovery, Resilience

19 Feb 2021

Ahead of the Prime Minister’s announcement on Monday, DRD Partner and Chief Executive of the Association for International Retail (AIR), Paul Barnes, shares his insight about what’s in store for the retail and hospitality sectors in the coming weeks and months.

Retailers wait with trepidation

As a retailer, there’s only one thing worse than closing your business for a national lockdown… And that’s reopening, only to be forced to close up shop again a few weeks later for another national lockdown.

As a result, retailers and hospitality business owners will be waiting with some trepidation to hear what Boris Johnson has to say about the ending of the current restrictions, when he presents his government’s plans next Monday.

Timing is everything

The success of the vaccine programme has put the Prime Minister under even greater pressure to open up early. But he is determined that this will be the last ever lockdown. This means he has to get the timing absolutely right, to minimise the risk that restarting the economy could lead to the need for a fourth version.

I’m sure most retailers would rather a slightly longer third lockdown than a whole new fourth one.  But that means that the Chancellor’s business support measures need to be extended until key parts of the economy can reopen properly and permanently.

The three R’s

As the Retail Minister, Paul Scully, told me yesterday, the Government’s priorities are centred around the three R’s: Reopening, Recovery and Resilience – short term measures to get the economy going again quickly, combined with a longer-term vision for the future of retail as a key driver of regeneration and economic growth, particularly in town centres.

Rishi Sunak has already hinted that some form of extension of the business rates holiday for retail and hospitality is on the way, telling local councils not to issue business rate demands until after his March 3rd Budget.

The jury is out on whether continuing the furlough scheme for much longer is good or bad.  City centre shops, bars and restaurants need office workers back at their desks, even if that is with a novel flexible working regime which the Government intends to enact under a new Employment Bill.

And the big elephant in the room is the growing tsunami of unpaid rent. This is currently held back by the government’s temporary moratorium on landlords taking action against tenants, but will bust through once that is lifted, potentially sweeping cash-strapped commercial tenants in its wake.


In reality, of course, nothing will be so black and white.  The lockdown will be wound down over time, not ended suddenly.  Shoppers will start to return to city centres as they start to feel safe on public transport and in crowded shopping streets.

After virtually a year of being told it is unsafe to go out, it will take some time to get many people back into the mind-set of going out to have some fun.

For local town centres that is likely to happen sooner, as we saw at the end of the first lockdown. But for commercial centres across the UK, the legacy of the pandemic is likely to have a long tail which could cause real problems, not just for individual businesses but for the viability of whole districts.

Look at Central London as an example.  It is one of the drivers of the UK economy, employing millions of people and generating huge amount of tax revenue for the Treasury.

But at the end of the first lockdown its recovery was far slower than the rest of the UK, as office workers, domestic tourists and international visitors stayed away, taking their wallets with them.

Bars, restaurants and theatres in London’s West End, still bound by restrictive social distancing measures and with far fewer customers, saw a particularly sluggish recovery – if any – after the last lockdown. And that’s likely to be the case again when the current one tapers out.

Temporary support and long term innovation

So, what do retail and hospitality businesses need, particularly in commercial centres? First, a continuation of the short-term support to reduce cost when income remains so low. Extend the business rates holiday, taper the furlough scheme and ensure it retains the flexibility to bring people back part-time.

But in the longer term we need measures to bring visitors back into our city centres and kick-start their retail and hospitality sectors. We need to lower the barriers that are keeping people out of our city centres – make people feel safe on public transport, temporarily remove the extended congestion charge in central London and lift, as soon as possible, international travel restrictions.

But then we need to do things to attract people back. Take a look, for example, at Westminster City Council, which has just announced its £150 million Oxford Street District transformation plans. This will create more and better space for pedestrians, together with new attractions such as the Marble Arch Hill, to be built in just a few months ready for this summer.

The end seems to be in sight but we still need temporary support to get there and longer term innovation so that together, we can build back better.