FAQs

Lockdown 2.0: What does it mean for business?

By 5 November 2020 No Comments
Lockdown 2

The start of England’s new month-long lockdown which comes into force today was an unsurprising step in the eyes of much of the public. By now the increased restrictions will seem familiar, yet there are key differences between this lockdown and the previous one. Schools and colleges will remain open, which will undoubtedly make working from home easier. Additionally, you can now also meet up with a friend from outside your household in a public space, with the relevant social distancing. The rules around exercise have been changed too, with unlimited exercise now being permitted. Other minor changes have been enacted such as public toilets remaining open, and there have also been amendments to which businesses may remain open during the lockdown period.

Dentists and opticians will not close as they did in the previous lockdown, and companies may operate a click and collect service. The aim of many of these measures is to ensure that businesses and the public have a slightly more comfortable and ‘normal’ lockdown experience, yet naturally the new rules raise questions as well as potential abuses. Many issues remain to be clarified, as there has been particular objection to golf courses and other sports venues where contact is minimal being closed. There has been criticism also that the criteria for which sectors can remain open and which cannot has been arbitrary. The current list of businesses that may remain open includes:

  • Supermarkets and corner shops
  • Petrol stations
  • Garages
  • Post Offices
  • Pharmacies
  • Vets and pet shops
  • Launderettes
  • Banks
  • Taxis and car hire services
  • Hardware stores
  • Funeral directors

With such an extensive list of exceptions, the reality for many will be work as usual. Yet for those not included in this bracket, the furlough scheme has been extended in what is an expected and logical move. Mortgage payment holidays have likewise been extended. What impact a second lockdown will have on businesses remains to be seen, with growing calls on the government to produce an impact assessment comparing indirect deaths from the lockdown and the economic damage against potential Covid deaths. As reports state that many hospitals are actually currently at a lower capacity than they would be on a normal yearly basis, backing for a second lockdown is by no means unanimous. 34 Tory backbenchers opposed the vote on the lockdown in the Commons yesterday, including former Conservative Party leader Iain Duncan Smith.

Former Prime Minister Theresa May was also among the lockdown’s critics, stating that the tiered system which had been in place had not been given enough time to fully take effect, citing the fall in cases in Liverpool. This is cold comfort for many businesses as this lockdown could not have come at a worse time as the run up to Christmas is a vital revenue stream. British Retail Consortium head Helen Dickson has stated that the decision to lockdown is a “nightmare before Christmas.” This sentiment will be echoed by many small businesses at this trying time. The BBC has however reported that smaller businesses have been more agile and resilient in resisting permanent closure, with accountants PwC reporting independent retailers on the High Street suffered 1833 losses in the first half of 2020, compared with the closure of 6001 chain stores by comparison. This underscores the gravity of the economic situation, with both sectors suffering the biggest decline since records began.

The discrepancy in closure numbers has been attributed to the adaptability of small businesses as they have brought in new products and quickly shifted their business model to encompass deliveries or take away services. It is also the case that government financial aid favours small businesses which have relatively small overheads when closed, coupled with receiving financial assistance from local authorities and the furlough scheme. Nevertheless, whether this assistance is enough to cover a potential loss of revenue in one of the busiest commercial periods is a huge question, and the rate of shop closure seems to be accelerating as 2020 rolls on.

The lockdown has also changed the type of goods consumers are buying. The wisdom is now: suits are out, sweatpants are in. Cosy homeware, snacks and treats, electronic goods, DIY and Hobbycraft all look to see a boom once again as the country spends their days stuck in the living room. Amid all the doom and gloom, it was reported that model train maker Hornby had returned to profitability for the first time in years as bored Britain seeks to pass the time with model railways. This unfortunately is a small bright spot in a very grey picture, and the economic impact of lockdown 2.0 is likely to be just the same as the first one – business closures, job losses, economic contraction, and hardship for many. To ensure that your business is adaptable as it can be in this period, check out our great range of payment solutions.