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Companies have warned of hundreds of millions of pounds in lost businesses over the coming weeks as they scramble to assess the cost of the new national lockdown.
Associated British Foods said its Primark high street chain would lose £375m in sales after the UK government said that all non-essential shops in England needed to close for at least one month from November 5 alongside similar measures elsewhere in Europe.
Retailers warned over the weekend that the forced closure of all non-essential shops would be a “nightmare before Christmas”. British Retail Consortium chief executive Helen Dickinson said the lockdown “will cause untold damage to the high street in the run-up to Christmas, cost countless jobs, and permanently set back the recovery of the wider economy”.
GVC, the bookmaker, said earnings would be hit by between £37m-£43m depending on the length of the closures of its high street stores. These estimates included using the government’s new financial support package, including the restoration of the original furlough scheme that covers 80 per cent of wages up to £2,500.
Insurer Hiscox said it could face an extra $30m-$40m of claims for cancelled events if Covid-19 restrictions lasted into next year.
Other companies scrambled to put staff back on a furlough scheme that was due to close at the end of October. Park Plaza Hotels on Monday said it would use the scheme as needed as its hotels in the UK would need to close again.
But others warned that it was already too late as staff had been made redundant ahead of the end of the closure of the original scheme. Restaurateur Jonathan Downey said it was “too late for the final 14 head office people left employed but made redundant yesterday (including me). These final few were out of a total of 90 in the group employed in March.”
Charlie Gilkes, who runs the Inception Group of bars and restaurants, said that he was still “formulating a plan” for his staff using the new furlough scheme. He added: “The timing couldn’t be worse — a large number of retailers and hospitality businesses do half their annual sales and profits in the coming eight weeks.”
Businesses have called on the government to provide greater support, with executives across consumer-facing industries such as retail and hospitality warning that this would be a “body blow” to their sectors.
It also emerged on Monday morning that prime minister Boris Johnson would no longer address the annual CBI conference as he focused on delivering a Commons address.
Lord Bilimoria, CBI president, said that business leaders were “hopeful they will hear from the prime minister as soon as possible, following the announcement of new restrictions”.
Smaller businesses are expected to be particularly hard hit given that many lack the financial resources to survive another lockdown, with pubs and restaurants across England warning that this could push them into collapse having been hoping for a busy pre-Christmas period.
Adam Marshall, director-general of the British Chambers of Commerce, said the restrictions will be a “devastating blow to business communities who have done everything in their power to adapt and operate safely”.
He added: “Many firms are in a much weaker position now than at the start of the pandemic, making it far more challenging to survive extended closures or demand restrictions.”
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