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UK Retail Exempt From New Three-Tier Lockdown

The U.K. government on Monday outlined its new restrictive measures for England as it tries to stem another rise in coronavirus infections.

Prime Minister Boris Johnson on Monday told the House of Commons that the new measures include a three-tier system of coronavirus, alerts that range from “medium” to “high” and “very high,” with corresponding levels of restrictions for each level.

Johnson specifically stated that retail, schools and universities would be allowed to stay open for now.

For now, retail is exempt from the new lockdown system. That’s good news for the retail sector, which saw temporary lockdowns for nonessential retailers during the first wave earlier this year. Those lockdowns have resulted in extensive job cuts—from companies such as John Lewis, Harrods, Marks & Spencer and Selfridges—and even a number of bankruptcies—such as Debenhams, the U.K. arm of Victoria’s Secret, Laura Ashley and Kath Kidston, with Peacocks parent Edinburgh Woollen Mill expected to follow shortly. Also, in July the Grosvenor Shopping Center in Chester, which houses 101 retail stores, went into receivership, which happens when a creditor or bank believes a business can’t pay its debts.

U.K.‘s Office for National Statistics said last month that retail sales volumes saw a sequential gain of 0.8 percent in August from the prior month. Within the retail distribution channel, apparel stores were still 15.9 percent below February’s pre-pandemic levels. Moreover, foot traffic trends for the two weeks covering Aug. 10-23 indicated that the highest percentage of businesses reporting decreased levels were textile, apparel and footwear stores at 85.7 percent.

Traffic levels at retail destinations have since fallen by 0.3 percent last week from the week prior as the U.K. saw its first full week of closures at the 10 p.m. curfew for the so-called hospitality outlets, according to brick-and-mortal retail activity tracking firm Springboard on Monday. Data from Springboard showed a decline of 39.0 percent in year-over-year footfall traffic at U.K. high streets for the week ended Oct. 4. Shopping centers saw traffic decrease by 31.7 percent over the same metric, with retail parks down 11.3 percent. Overall, all U.K. retail destinations were down 30.9 percent year-over-year.

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The beginning lockdown level, “medium,” currently applies to most of England, which has restrictions that include banning groups larger than six people and forcing certain establishments such as pubs and restaurants to close at 10 p.m. The next level is “high,” which applies to many parts of northern England, where infection rates have been on the rise. In those areas, residents aren’t allowed to gather indoors or meet anywhere unless they are outside. The most restrictive level is “very high,” which reflects areas that are seeing a rapid rise in rates of Covid-19 infection. In these areas, certain places such as pubs, bars, gyms, betting shops and casinos will be closed. Currently, only the city of Liverpool is slated to be on “very high” alert, starting on Wednesday.

Elsewhere across the U.K., pubs and restaurants have been closed in some parts of Scotland and Wales. Some parts of Wales also have local lockdowns in place due to a spike in Covid-19 cases.

Just prior to Johnson’s comments to the House of Commons on Monday, England’s National Health Service’s medical director Stephen Powis warned of increasing hospitalizations, noting that three “Nightingale” hospitals built during the first Covid-19 wave in northern England in Manchester, Sunderland and Harrogate have been put on standby.

The U.K. isn’t the only country facing the dreaded second wave of Covid-19. Italy, once the hotbed in Europe during the initial outbreak of the pandemic earlier this year, is also mulling new restrictions. European neighbors France and Spain have tightened up measures to curb the spread, with more French cities on “maximum alert.” Germany has also started to see an increase in infections in some of its larger cities. Elsewhere in the world, the U.S. and Canada are also seeing an uptick in new cases, particularly now that the summer season has shifted to autumn’s cooler temperatures.