Only half of all shops have re­opened

The pan­demic has seen com­pa­nies across the board scram­bling to axe nearly 113,000 roles, write Josh Wil­son and Alex Clark ‘Re­tail­ers need sup­port with rent so that they are not shoul­dered with un­payable debts in the long term’

The Daily Telegraph - Business - - Front Page - By Laura Onita and Rus­sell Lynch

RE­TAIL­ERS have opened only half of shops since the lock­down re­stric­tions were eased as some cus­tomers are still avoid­ing stores.

Of the 20,351 sites that were al­lowed to re­open, in­clud­ing restau­rants, take­away shops and travel agents, 52pc had done so, ac­cord­ing to a sur­vey from the Lo­cal Data Com­pany. Two thirds of restau­rants opened and al­most all fish and chip shops and take­aways.

Only 40pc of travel agents had opened. How­ever, car deal­er­ships and es­tate agents had the most units open, as they got the green light from the Gov­ern­ment be­fore other non-es­sen­tial busi­nesses.

The East Mid­lands had the low­est re­open­ing rate across Eng­land at just 43pc, with Greater Lon­don not far ahead (44pc). The re­luc­tance of con­sumers to visit stores, bars and restau­rants is putting pres­sure on busi­nesses.

More than 600,000 teenagers have been fur­loughed.

Last week, Rishi Su­nak, the Chan­cel­lor, un­veiled a new Kick­start Scheme to en­cour­age em­ploy­ers to take on younger work­ers, af­ter 47pc of work­ing teenagers were fur­loughed com­pared with 31pc of all el­i­gi­ble em­ploy­ees.

‘It’s no sur­prise that these job losses are so high when we saw the com­plete shut­down of avi­a­tion world­wide’

Anal­y­sis by The Daily Tele­graph has re­vealed the shock­ing scale of the coro­n­avirus in­duced jobs cri­sis, with Covid-19 de­liv­er­ing a crush­ing blow to the UK’s avi­a­tion and con­sumer sec­tors as the in­dus­try’s key play­ers an­nounce more than 85,000 job cuts.

Across the en­tire econ­omy, ma­jor com­pa­nies are con­sid­er­ing ax­ing the jobs of some 112,964 work­ers, our anal­y­sis found. Nearly half of these lay­offs were an­nounced in June, with 26 com­pa­nies con­sid­er­ing cut­ting up to 55,773 jobs in to­tal – four times higher than the num­ber of an­nounced job cuts in May (13,714).

The find­ings – from an anal­y­sis of cor­po­rate lay­off an­nounce­ments made since the be­gin­ning of March – show the chal­lenge fac­ing the Gov­ern­ment as it tries to avoid mass un­em­ploy­ment while wind­ing down the UK’s £19.6bn fur­lough scheme.

Avi­a­tion and aero­space in­dus­tries bear the brunt

Since coro­n­avirus has vir­tu­ally wiped out de­mand for air travel, Bri­tish avi­a­tion and aero­space firms have been on the re­ceiv­ing end of a wal­lop­ing and have an­nounced 48,500 UK jobs could be axed.

Air­lines and air­ports have also been hard­est hit on a pro­por­tional ba­sis, with those an­nounc­ing lay­offs set to lose on av­er­age a quar­ter of their UK work­force.

Some of the in­dus­try’s big­gest and best-known names have been forced into culling large por­tions of their staff.

This in­cludes Bri­tish Air­ways, which stated in April that it would be slash­ing as many as 12,000 work­ers, amount­ing to more than a quar­ter of the air­line’s 45,000-strong work­force, and plane-maker Air­bus, which is set to cull 15,000 jobs glob­ally and 1,700 in the UK.

So far the UK Gov­ern­ment has de­clined to pro­vide the strug­gling in­dus­try with any tar­geted help be­yond the stan­dard busi­ness sup­port schemes of­fered across the wider econ­omy.

“It’s no sur­prise that these job losses are so high when we saw the com­plete shut­down of in­ter­na­tional avi­a­tion and gov­ern­ments around the world in­tro­duc­ing a whole swathe of bor­der and travel re­stric­tions,” says Tim Alder­slade, chief ex­ec­u­tive of Air­lines UK, the trade body for UK reg­is­tered air­lines.

“The dif­fer­ence be­tween the UK and our in­ter­na­tional ri­vals is that their gov­ern­ments have in­ter­vened with gen­er­ous sup­port pack­ages to help their air­lines through this cri­sis … Min­is­ters here have re­fused to even coun­te­nance sec­toral mea­sures that go be­yond the econ­omy-wide sup­port al­ready an­nounced.”

Raft of re­tail and hos­pi­tal­ity firms en­ter ad­min­is­tra­tion

Bri­tain’s vast re­tail and con­sumer in­dus­try has also been dealt a hefty blow by coro­n­avirus and the na­tion­wide lock­down.

So far July has seen 19 com­pa­nies an­nounce 23,219 job cuts across the econ­omy, with over two thirds of these in the re­tail and hos­pi­tal­ity sec­tors. A num­ber of the high street’s most well-known names have al­ready col­lapsed into ad­min­is­tra­tion, in­clud­ing Cath Kid­ston, Laura Ash­ley,

Oa­sis and Ware­house and Vic­to­ria’s Se­cret – with some 37,975 jobs at ma­jor firms in the fir­ing lines across the in­dus­try as a whole. Those com­pa­nies that re­main face crip­pling so­cial dis­tanc­ing mea­sures that will make it enor­mously dif­fi­cult for many of them to sur­vive.

In his re­cent “mini-Bud­get” Rishi Su­nak, the Chan­cel­lor, an­nounced mea­sures to help the hos­pi­tal­ity sec­tor, in­clud­ing cut­ting the VAT rate to 5pc and of­fer­ing a 50pc dis­count for din­ers to spur de­mand, while the two-me­tre rule has also been par­tially re­laxed. How­ever, in­dus­try ex­perts have warned that this may not be enough. Kate Ni­cholls, chief ex­ec­u­tive of UKHospi­tal­ity, said: “While we wel­come the sup­port from the Chan­cel­lor which has been far­reach­ing, pro­vid­ing a life­line to many busi­nesses and en­abling them to sur­vive to this point, it is patently clear that in or­der to make it through this cri­sis, and to par­tic­i­pate in the re­cov­ery, on­go­ing mean­ing­ful sup­port will be re­quired for some time. All the while there are re­stric­tions in place that pre­vent these busi­nesses op­er­at­ing at nor­mal lev­els there needs to be sup­port.”

He­len Dick­in­son, head of the Bri­tish Re­tail Con­sor­tium, sim­i­larly said: “The Gov­ern­ment must do more; re­tail­ers need sup­port with rent so that they are not shoul­dered with un­payable debts. With­out this, hun­dreds of thou­sands of jobs and high streets across the coun­try will hang in the bal­ance.”

Man­u­fac­tur­ing, au­to­mo­tive, con­struc­tion and ser­vice in­dus­tries strug­gle

No cor­ner of the work­force has been spared from the fall­out, and the man­u­fac­tur­ing, au­to­mo­tive, con­struc­tion and non-fi­nan­cial ser­vice in­dus­tries have all also seen their share of job cuts.

Cen­trica, the owner of Bri­tish Gas, has de­clared it will axe some 5,000 po­si­tions across the coun­try, the third most of any com­pany to have de­clared cuts in the UK.

Other ma­jor names in­clude Roll­sRoyce (3,000 cuts in the UK), Travis Perkins (2,500), DHL (2,200) and Jaguar Land Rover (1,100). Busi­ness ac­tiv­ity in these sec­tors plunged across April and May as man­u­fac­tur­ing plants shut down, au­to­mo­tive fac­to­ries closed their doors, con­struc­tion site work­ers downed tools and es­tate agents were un­able to of­fer house view­ings.

The closely watched pur­chas­ing man­agers’ in­dex (PMI) sur­vey of com­pa­nies came in at just 13.4 for the ser­vice in­dus­try and 32.6 for man­u­fac­tur­ing – any score be­low 50 sig­nals a con­trac­tion. These fig­ures have since re­bounded some­what, but the re­cov­ery re­mains slow.

Tsunami of job losses as fur­lough nears its end

Firms have been heav­ily re­liant on the Gov­ern­ment’s tax­payer-funded fur­lough scheme, which has seen 9.4m jobs pre­served across the UK. How­ever, the scheme is due to end in Oc­to­ber, and ex­perts have warned that a “tsunami of job losses” is poised to strike when it does.

The Cen­tre for Eco­nom­ics and Busi­ness Re­search has al­ready warned that un­em­ploy­ment could peak at a record 3.3m this year.

Based on our anal­y­sis here it looks like we could be well on our way to achiev­ing that record.

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