First Minister Nicola Sturgeon’s placing of 11 local council areas in Level 4 is “a hammer blow to hard-pressed retailers.”
The sector’s trade body was responding to news that will mean so-called non-essential shops in these council areas shuttered for three weeks, during what is traditionally the key trading period of the year for many.
The Scottish Retail Consortium (SRC)estimates this will affect more than 45% of non-essential shops in Scotland, and those shops will lose out on more than £90m per week in lost revenue whilst they are closed.
Non-essential shops were shuttered for 14 weeks in the Spring to help the fight against the pandemic and shuttered 16 weeks for those within shopping centres and malls.
SRC data shows that over recent months non-food stores are consistently trading about a fifth down on last year.
The SRC has consistently explained shops have taken every mitigation possible to keep customers and staff safe.
A recent SAGE paper explained the closure of non-essential retail would only have a “very minimal impact on R values”.
SRC director David Lonsdale said: “Many Scottish shops face a bitter winter following this deeply disappointing announcement on store closures.
“There is little evidence shuttering shops does much to suppress the spread of Covid, but it’s undeniable closing high street stores in November and into December during the critical Christmas trading period is a hammer-blow to hard-pressed retailers.
“This is the worst possible time to close these stores, who often need a strong end to the year to tide them over the lean winter period.
“These shops are set to miss out on over £90m of lost sales each week, following eight months of declining sales. The blunt reality is the offer of grant support won’t make up those lost sales – we can only hope those shops forced to close can weather the next few weeks.”
Meanwhile the Scottish Licensed Trade Association warned the moving parts of west central Scotland into Level 4 “effectively signals permanent closure” for many pubs and restaurants.
Responding to First Minister Nicola Sturgeon’s announcement in the Scottish Parliament today, the SLTA’s managing director, Colin Wilkinson, said: “This is the worst possible news for the licensed hospitality industry and there will be many operators who will now be seriously considering if their businesses have a future at all – that’s how serious the situation is.
“Many operators in levels two and three areas have already taken the reluctant decision to close down their businesses as it is simply unviable to operate with the current restrictions on the sale of alcohol and the operating times that are currently in place.
“Even hotels and restaurants serving food feel defeated by these unnecessarily complex and ever-changing guidelines.
“Moving into level four suggests that the closing of pubs and bars in October in five health board areas, prior to the introduction of the tier system, has done little to bring down the rate of Covid-19 infections,” said Mr Wilkinson.
“And yet again, there has been no meaningful engagement with our industry and there has been no evidence to prove that the virus is being spread within the licensed hospitality sector.
“We reiterate that we support the goal of suppressing the virus – of course we do,” he continued. “But we also reiterate that we are a sector in crisis with hundreds of businesses facing permanent closure and thousands of jobs hanging in the balance. Sadly, for some, the damage is already irreparable.”
Meanwhile, an SLTA survey of 600 on-trade premises highlighted that within the pub and bar sector, 50,000 jobs could go.
The trade body estimates that two-thirds of hospitality businesses could be mothballed or go under in the coming weeks.
More than 50% of jobs in the pub and bar sector could also be lost which will have a particularly deep impact on the employment of young people as over 45% of staff employed are under the age of 25.
Wilkinson added: “Closing these businesses also brings additional immediate financial costs for operators with the cost of actually closing a small wet pub around £2,000, a medium food pub around £6,000, and a large pub between £8,000 and £10,000.
“There are also the ongoing costs while closed which fall far short of support grants currently in place.”
An SLTA survey, he added, revealed that the average fixed costs over a wide range of licensed hospitality business types came to more than £11,000 per month.
A total of 11 council areas are to be placed into Scotland’s highest tier of coronavirus restrictions later this week, Nicola Sturgeon has said.
The Level 4 measures, similar to a full lockdown, will apply from 6pm on Friday in Glasgow, Renfrewshire, East Renfrewshire, East Dunbartonshire, West Dunbartonshire, North Lanarkshire, South Lanarkshire, East Ayrshire, South Ayrshire, Stirling and West Lothian.
Scotland’s First Minister announced the decision to MSPs in the Scottish Parliament on Tuesday at the weekly review of the Scottish Government’s coronavirus measures.
She said the “stubbornly and worryingly high” infection rates in these areas mean they will move from Level 3 into Level 4 of the five-tier system.