All of England is under a strict new lockdown through the middle of the February, as coronavirus infections—especially those of the new highly transmissible variant—surge nationwide even as the U.K. begins the “biggest vaccination programme” in its history.
In announcing the shelter-in-place measures during his address to the nation Monday, Prime Minister Boris Johnson noted the “frustrating and alarming” speed at which the new strain—identified last month and now active in 33 countries, including the U.S.—is infiltrating the population.
“Today the United Kingdom’s Chief Medical Officers have advised that the country should move to alert level 5, meaning that if action is not taken NHS capacity may be overwhelmed within 21 days,” he said, referring to the National Health Service.
All nonessential retailers were already on temporary lockdown since Jan. 1, when 75 percent of England was under Tier 4 restrictions. Some schools were initially expected to reopen, but now will be closed under the new rules.
Primark has already raised forecasts on lost sales by $299.9 million to $886.1 million from a guidance of a loss of $586.2 million in early December. But with lockdowns lasting through the middle of next month at a minimum, those estimates are likely to climb. And Primark is not the only retailer to suffer a pandemic-inflicted blow.
“The continued rise in Covid cases over the Christmas period is a significant cause for concern, and we understand the need for the government to act. Retailers have been playing their part to make stores safe, spending hundreds of millions of pounds on coronavirus safety measures, including implementing social distancing measures and increased cleaning procedures,” Helen Dickinson, CEO of the British Retail Consortium, said on Monday.
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“The consequences of these latest restrictions—with non-essential retail already closed for several weeks—will be severe for many businesses who yet again face losing [2 billion pounds ($2.71 billion)] per week in sales,” she added. “Already, 178,000 retail jobs have been lost in 2020, and with over 250,000 retail staff currently on furlough, that number could increase dramatically in the new year.”
Dickinson is also urging the government to broaden its support for retail. “Retailers want to trade their way to recovery but if they are forced to close then further financial support will be needed or many businesses will go bust and thousands of viable jobs will be lost,” she added. “The biggest difference the government can make is to extend business rates relief from April for those hardest hit by repeated lockdowns.”
A number of U.K. retailers have already fallen into administration, the equivalent of a bankruptcy in the U.S. Still awaiting their fate is Debenhams, which is expected to liquidate in March, as well as bankrupt value chain Peacocks and the brands under the Arcadia umbrella, such as Topshop, whose building at the intersection of Oxford and Regent Streets is reportedly up for sale.
While the new U.K. strain is more contagious, it is not believed to be deadlier, and scientists say that available vaccines should also be effective against the surging variant. However, the mutation out of South Africa remains a concern, as scientists aren’t yet sure if the vaccines will offer protection against it.
Additional reporting by Jessica Binns.