Retail sector has most to lose from tougher restrictions

Cantillon: If retail collapses it will bring a lot of others with it

While hospitality gets most of the attention in the business pushback against more restrictive virus measures, the dangers facing retail are what concentrated minds in Government as the country teetered on the brink of level 5.

The retail sector has most to lose in coming weeks if virus numbers can’t be reined in.

The Government has already shown itself willing to shut down all or part of the hospitality sector to fight coronavirus. It will do so again so the sector may be better off focusing lobbying efforts on fiscal supports for businesses rather than fighting to stay open even if infection rates are high.

For retailers the battle to trade is still on. A move to level 5, or even level 4, would have shut all retailers with the exception of grocers, pharmacists and a handful of others considered essential to the functioning of society. If the country can stay at level 3 or below all retailing can continue unhindered.

The timing of NPHET’s call for the country to move to level 5 restrictions could scarcely have come at a worse time for retailers as they plan for the Christmas shopping season that many were hoping would help them to salvage something from a miserable 2020.

It would have been a hammer blow to consumer confidence in the run-up to Christmas, and there is always the chance that level 5 status could be extended beyond any four-week proposal and into the shopping season itself.

November and December are to retail what July and August are to tourism.

If virus numbers cannot be dampened and the country ends up in level 5 anyway, shoppers will flock online in their droves. Three-quarters of online retail revenues leave the country to enrich global players such as Amazon.

Meanwhile, most of the sector that employs more than 280,000 would end up on State unemployment supports, local authorities would not be able to charge businesses rates, and the choking off of rental income could spark a major crisis in the commercial property sector, and ultimately with the banks.

If the retail sector collapses it will bring a lot of others with it. The Government was understandably wary about reaching for the nuclear option.