Retail is taking nothing for granted in its big reopening
We’ve been here before, haven’t we? Last summer, in fact. This week sees the next phase of the great reopening, but even the bombastic Boris Johnson seems disinclined to get ahead of himself. His government’s being a tad more cautious this time around; there’s certainly no Eat Out to Help Out 2.0 in the offing.
Caution is also the watchword among non-essential shops, which will be reopening their doors. Having missed out on £30bn of sales, they’re desperate to get moving, but all the talk is of safety.
There may well be a rush of people looking to get some air in the early days, but beyond that the picture is cloudy. The challenge facing retailers is how to tempt the Covid-cautious as well as the Covid-confident, hence the British Retail Consortium (BRC) touting the hundreds of millions of pounds spent on safety
measures.
It also appears alive to potential problems that could be caused by a subset of shoppers who are simply reckless. Their behaviour could keep Covid-cautious individuals in their homes and leave retail workers wishing they were still on furlough.
The BRC publicly called on customers to “play their part” in making reopening safe with its chief executive, Helen Dickinson, urging consideration and respect for “fellow shoppers and hard-working staff”. Speaking of the mini-boom expected this week, she said: “The real test will be how this holds up.”
Her concerns are valid. If shopping means encountering mask-free yahoos puffing out their chests and acting like WWF wrestlers when someone politely asks them to don a face covering, then Amazon’s boss, Jeff Bezos, will be able to order that gold-plated yacht he’s had his eyes on 20 times over.
Covid-related information, the ebb and flow of optimism and pessimism, is painting a puzzling picture for the public. One day there’ll be grim news about the latest variant coughed up in Brazil courtesy of Jair Bolsonaro’s misrule. Next the phrase “herd immunity” will be making a comeback, as it did at the end of last week. It’s coming within days, said researchers at University College London. Why aren’t ministers opening up, cried The Daily Telegraph in response.
Perhaps because, as healthcare analyst Adam Baker at broker Jefferies noted, “being overly reliant on a single model is never a good idea”. Baker thinks UCL’s research offers “some hope that a large ‘exit wave’ can be avoided in the summer’”. But as he wisely noted: “As everything with Covid-19 – watch this space.”
That might explain the transport secretary, Grant Shapps, suggesting that Britons could start thinking about foreign holidays at the end of the week, before adding more caveats than you’ll see in one of those adverts pharmaceutical companies like to run in the US. You know, the ones in which they try and read out the side effects really quickly but still manage to take up more than half the ad’s run time with them.
So you can think about your holiday, but you’ll want to check what the situation is in two or three weeks’ time, and we’ll be producing a green, amber and red list that will be subject to change, and you’ll need to get tested and make sure that you’ve got good holiday insurance and flexible flights and the rest of it. Try reading that lot out quickly in one breath.
It is true that the City is feeling good. The markets ended the week down a bit, but a recent injection of rocket fuel means that the FTSE 100 has put on about 25 per cent since the end of October. The second-tier FTSE 250, which is made up of more UK-focused companies, recently hit a record.
Deloitte’s quarterly UK survey of finance directors, which includes 21 from the top index and 42 from the 250, shows the markets’ excitement is reflected in Britain’s boardrooms. Published today, it reports confidence at “record levels”.
“CFOs anticipate a strong recovery in profits over the next twelve months, with profit expectations back to the previous high seen in mid-2014 at the top of the economic cycle,” says Deloitte. “A brighter backdrop has tilted companies away from defensive strategies, such as cost control, while expectations for hiring and investment have reached their highest levels in nearly six years.”
The last part, in particular, is good news. But while I’m not loving playing the role of Jeremiah, there’s a lot
Deloitte’s quarterly UK survey of finance directors shows the markets’ excitement is reflected in Britain’s boardrooms
of work to be done for those high spirits to be justified. What the last 12 months have taught us is that a certain nasty little coronavirus could yet extend one of those now-famous protein spikes to give us all the bird.