The Fortnum & Mason CEO today gloomily predicted a third of British retail brands will disappear by March after an 80% plunge in footfall due to lockdown and shoppers avoiding the West End.
Ewan Venters said the Government’s new strict tier system, which bans people meeting anyone outside their household indoors, would restrict the number of shoppers venturing into stores over the crucial Christmas period.
He told BBC Radio 4’s Today programme: ‘I predict that by the end of the first quarter of next year up a third of British retail brands will disappear.’
Boris Johnson imposed brutal Tier 2 and 3 rules on 99% of England yesterday, with the higher category banning all hospitality business, while the other permits pubs to stay open only if they serve food.
Tier 3 areas will also see bans on any other indoor entertainment venues, including casinos, amusement arcades, bowling alleys and museums.
Non-essential shops are allowed to stay open under all tiers, but footfall is set to be hit by bans on the ban on gathering indoors and restrictions on bars and pubs.
Ewan Venters said the Government’s new strict tier system, which bans meeting anyone outside your household indoors, would restrict the number of people venturing into shops over the crucial Christmas period
Mr Venters, who will leave his role in the New Year, said the lack of footfall would hurt Fortnum’s, the upmarket Piccadilly department store established in 1707.
‘It puts the business in a fragile position because so much of our sales and profitability comes from the month of December, and in a large part, November,’ he said.
‘Fortunately we have a strong balance sheet and good cash reserves so we’ll see through this storm but for a number of retailers the lack of Christmas trade would put them in a perilous position.’
The 48-year-old said even some of the best brands could fall victim to the Covid slump.
‘I was rather unpopular when I said that there were a number of businesses that needed to go to the wall because they weren’t great brands before Covid.
‘But sadly now, with this extended period, there are some fantastic brands and some well run businesses who will fall victim because they are simply not getting the sales they need to survive’.
To help boost the high street, he called for reform to business rates and a u-turn on scrapping tax-free shopping.
The warning echoes comments by Richard Caring, one of Britain’s top restaurateurs, who yesterday savaged the Government’s severe new tier system as a death sentence for the hospitality sector.
Richard Caring, who owns chains including The Ivy and Bill’s, believes that more than two thirds of his industry has been so mauled by lockdowns that it will never recover.
Mr Caring told MailOnline: ‘This government bounces off one wall onto another, its inexperience and inefficiencies are shown clearly in the manner they have handled this awful pandemic so far.
‘It has turned both its inexperience and inefficiency against the hospitality industry of this country.
‘Already what was the second largest industry in this country has been permanently decimated by at least 35%, never to return.’
Mr Caring singled out as particularly vulnerable the cities of Manchester, Leeds, Birmingham and Bristol ‘where the hospitality industry, hanging on by its finger nails, was hoping to be able to make some income in their most busy weeks of the year.’
The cities Mr Caring mentions have all been plunged into Tier 3, meaning that they will effectively transition into lockdown by another name on December 2. London and Liverpool are the only cities not to be in Tier 3.
All but three places will be plunged into Tier Three or Two (shown in red and orange) when England’s national shutdown ends on Wednesday
The only pittance these desperate restaurants and bars can now rely on is through takeaway orders.
Mr Caring warned that ‘survival through January/February will be a nightmare as the first quarter of the year is always the toughest.’
‘For those unfortunate employees on furlough I dread to think how many hundreds of thousands are now effectively unemployed,’ he added.
The tier restrictions are anticipated to last until at least April and, according to a dossier from the Treasury watchdog, could run into the middle of next year.
Mr Caring asks: ‘Why is this country the one whose economy will suffer the worst?
‘Why does this country have one of the worst COVID death per capita in the world?
‘As far as hospitality goes and the government’s present comprehension, the death now will only get louder.’
The British economy is staring down the barrel of its worst recession since the Great Frost of 1709 and is among the worst affected in Europe, along with France, Spain and Italy.
And despite battening down the hatches, Britain has one of the worst death tolls in the world (fifth by total) and per capita the countries are ranked as follows: Belgium, Peru, Italy, Spain and the United Kingdom.
As an example of the government’s ‘inexperience,’ Mr Caring highlighted the curfew rule, which still stands in Tiers 1 and 2 under the new system.
He said: ‘The ridiculous 10pm curfew did little more than destroy more of the industry while at the same time throwing tens of thousands of people together in uncontrolled masses.
‘The government continued with incompetence, even after they were informed (even by the scientists) that this was only going to serve to increase the spread of the virus, while at the same time further destroy an industry already on its knees.’
Under the allocations announced today, just 700,000 people – 1% of the population – will be subject to the loosest grade of restrictions. Before November 5 there were 29 million in the lowest tier.
Meanwhile, around 55 million residents will be in the toughest two levels after the blanket national lockdown ends on December 2.
Richard Caring, owner of restaurant chains including The Ivy and Bill’s, has torn the government to pieces over its ‘inexperience and inefficiency’ in dealing with Covid
A shuttered restaurant on the Strand in central London during the second national lockdown earlier this month
It has sparked a huge backlash, with anger at the lack of clear thresholds for entering and leaving Tiers, and many local MPs in low-infection areas enraged at being lumped together with nearby hotspots.
The government has published a narrative explanation of why each area is going into each tier, but has dismissed calls to use numerical trigger points.
A slew of senior Tories have threatened to rebel in a crunch vote on the plans next week.
Recent figures have shown the impact Covid restrictions have already had on struggling high streets.
One in eight shops have never reopened since the first lockdown began with 5,500 still closed as tourists and office workers stay home.
Analysis of retailers with more than five stores nationwide found out of 43,766 shops, 5,552 (12 per cent) have kept their doors shut since March, leaving nearly 900 acres of shopping space unused for eight months.
Around 2,000 shops closed permanently, while 36,209 managed to reopen after the first lockdown.
The study by PWC and the Local Data Company found shops in high streets and city centres have been hit hardest, as the chairman of Fenwick department stores declared footfall in London ‘dead’.
Yesterday, All Bar One, Toby Carvery and Harvester owner Mitchells & Butlers confirmed around 1,300 jobs have been axed as it revealed the pandemic sent it plunging to a £123 million annual loss.
The pubs giant laid bare the extent of the recent redundancies as annual results showed the hefty annual losses for the year to September 26 from pre-tax profits of £177 million the previous year.
Last week, fashion change Peacocks and Jaeger fell into administration, putting more than 4,700 jobs and almost 500 shops at risk.
The retailers, which were both part of billionaire Philip Day’s EWM Group retail empire, confirmed they had appointed administrators from FRP Advisory.
The administrators said no redundancies or store closures have been confirmed yet.
Since March, more than 200,000 job losses have been announced by firms affected by the Covid-19 pandemic.
Yesterday, All Bar One, Toby Carvery and Harvester owner Mitchells & Butlers has confirmed around 1,300 jobs have been axed as it revealed the pandemic sent it plunging to a £123 million annual loss