Leading figures in the retail sector want the Government’s reopening plan to be reviewed after detailed new industry research laid bare the huge monthly declines stores are facing for the rest of 2020.
The sector-by-sector survey of 360 chief executives operating 4,500 outlets, by industry group Retail Excellence and disclosed to The Irish Times, predicts in-store revenues will be down by an average of 65 per cent across the sector next month. Some sectors, such as cinemas, face total wipeout in June.
Even after lockdown is unwound, most retailers are facing a financial disaster due to capacity reductions from stringent social distancing, as well the effects of general economic malaise and consumer fear.
Chief executives across the sector predict an average total decline of almost a quarter in the crucial Christmas shopping period of November and December. Some sectors, such as jewellery, predict declines of more than a third in sales this Christmas. Most sectors will see growth in online sales, but many are coming off a low base and it won’t come close to making up for the in-store declines.
The Retail Excellence research asked the 360 chief executives across 16 industry sectors, excluding grocery, for their budgeted monthly declines for the rest of the year. Cafes and fast food shops will be hardest hit, with declines of 95 per cent in June, falling to 50 per cent by September/October. "Social distancing is the issue," said David Fitzsimons, chief executive of Retail Excellence.
Cinemas will also be particularly badly hit this year, with reopenings not allowed until August 10th. This contrasts with cinema reopenings across the rest of Europe from May or June. Even by November/December, Irish cinema chief executives say they are predicting declines of 36 per cent.
Garden centres and DIY stores will weather the turmoil best, due to running large facilities often with outdoor components. Garden centre sales will be down in-store between 28 per cent and 11 per cent each month for the rest of the year, but will rise online by 105 per cent, in June, and by 43 per cent each month at year end.
The “tactile” sector of jewellery will be down this year between 74 per cent next month and 35 per cent by year end. The malaise in “fashion and lingerie” sales will continue right through the Christmas period with total declines for June of 73 per cent moderating to a one quarter drop for the last two months of the year.
Meanwhile, fashion online sales will jump by a predicted 107 per cent next month, moderating to a 57 per cent increase by December, as the sector faces “significant migration online, as what was an enjoyable in-store browsable experience is anything but now” due to anti-coronavirus measures.
Mr Fitzsimons said he believes the scale of the damage will be “so significant, the economy is on the verge of collapse”.
“I think the Government’s reopening phases will have to be rethought,” he said.
He said shopping centre retailers, in particular, will suffer “irreparable damage” as they are not allowed reopen until August, while street-entry retailers can reopen weeks before them and will swallow any pent-up demand.
“When August rolls around, I believe that parts of shopping centres will stay shuttered when they reopen because some retailers won’t see the point. I can hear the strain in the chief executives’ voices when I talk to them,” he said.