Politics

The big challenge ahead for shops and pubs as coronavirus restrictions ease

Consumer-facing businesses are facing the challenge of luring consumers back in when restrictions are potentially eased next month.

According to an official 60-page document published on Monday, it appears that some establishments could reopen as early as 1 June, though the hospitality sector is not likely to restart before July.

READ: US re-openings to give steer on how post-lockdown restaurant sector will look says Barclays

So far, the government has not mentioned what kind of businesses will be first and what safety measures will be imposed.

“There is not enough detail for us to understand what is ahead,” Patrick O'Brien, UK retail research director at GlobalData, told Proactive.

However, companies need to start developing a strategy to attract consumers.

“Even when restrictions are lifted, it is not going to be business as usual for retailers at all,” OBrien told Proactive. “They will need to take measures to make the shoppers feel the desire to come and likewise employees need to feel it is safe to work.”

Fashion designers are going to have a harder time compared to other retailers, as they will have to figure out how customers can touch or try on garments.

“Not only they will have to make shoppers feel safe, but also happy enough to make that purchase. That is an extraordinarily difficult balancing act,” OBrien concluded.

Next PLC (LON:NXT) already told investors it will open out of town stores first, noting that larger spaces allow social distancing.

According to Hargreaves Lansdown analyst Sophie Lund-Yates, other shops may follow suit, though it is still early to understand how the industry could move.

And while Next is better placed than others to navigate the crisis thanks to its online offering, it is not clear what other names will emerge with fewer bruises.

READ: M&S double upgraded and Next downgraded as Credit Suisse rebalances views on UK retail

Another hard-hit segment will be the hospitality sector, with eateries to take more battering, Peel Hunt reckons.

Restaurants and food-led pubs are expected to make losses at a faster pace when reducing capacity when compared to wet-led pubs.

Analysts pointed out that consumers will focus on quality rather than quality, leading to a further polarisation in demand.

Revolution Bars Group PLC (LON:RBG), Mitchells & Butlers PLC (LON:MAB) and JD Wetherspoon PLC (LON:JDW) are expected to rack up debt, although it is forecast to dwindle down by 2022.

Other players estimated to emerge on the other side will be Restaurant Group PLC (LON:RTN), Domino's Pizza Group PLC (LON:DOM) as well as Peel Hunts house stock Loungers PLRead More – Source