SHOP LIFTING

Stuart White 26-06-2020 9:30 AM
Categories: HRMC Articles written by Managing Director, Stuart White

Anyone who’s been out and about at month-end will attest to the fact that Botswana has an on-going love affair with old-fashioned, footfall shopping.  The furniture and appliance stores are packed to the rafters, long  queues at the tills are commonplace, car parks are full to overflowing and main thoroughfares are jam-packed as the nation rushes to shop till it drops.  So much so that at the end of last month, in a post-lockdown feeding frenzy, the Western By-pass was gridlocked at the northern end and traffic cops had to be called in to sort the situation.

There are numerous reasons for this, not least of which is that shopping online mainly means buying from overseas, incurring hefty postage and customs duty charges, mail is often delayed if not lost and the exchange rates sometimes punitive so, all in all it’s cheaper and more convenient to purchase in person from a local store.  Overseas, however, this is not the case.  Consider the rise in growth of online retail giant Amazon.  Originally a purveyor of CDs, DVDs and books, there is now almost nothing you can’t purchase from one of their sellers, ditto Alibaba, eBay and others.  Add to that the fact that most major retailers now have an online purchase facility and it’s easy to see why First World consumers are deserting the High Street in droves, preferring to shop from their laptop, smartphone or tablet for anything from socks or suites of furniture.  Add to that the increase in floor rental and  heavy council rates and levies on commercial premises and the result  in countries such as the United Kingdom is that small shops, large stores and even big name department chains have been closing in drovers over the past decade, leaving only coffee outlets, bookies and boarded-up shop fronts in their wake.

Sticking in the UK, their Lockdown has been extremely severe and long-lasting.  Unlike  here,  supermarkets that carried a wide range of goods were not required to rope off ‘non-essential’ items, nor were they barred from selling them but there were some well-publicised incidents in  its initial stages where over-zealous police officers had stopped shoppers inside and outside stores to inspect their purchases and issue warnings for being in possession of items deemed ‘non-essential .  After a public outcry the government was forced to issue a clear statement to the force stipulating that if an item was on a shop shelf, it was legal and permissible for shops to sell it and consumers to buy it.  Nonetheless, other stores such as clothing, furniture, appliance and book shops were forced to remain closed, in spite of their sustainability being in jeopardy even before the Corona Lockdown.  And indeed, in the ensuing three months, many did go under.  Even some big, household names such as Debenhams, whilst not completely going out of business, were forced to close less profitable branches and lay off hundreds of employees.

But as of last week, the long  hiatus was over.  Those shops still solvent were given the all-clear to re-open, albeit with strict sanitation guidelines.  Speaking during a visit to the Westfield shopping centre in east London to mark the event, British Prime Minister Boris Johnson said he hoped to see a ‘gradual’ build-up of people visiting the high street.

‘I am very optimistic about the opening up that’s going to be happening,…I think people should shop and shop with confidence but they should of course observe the rules on social distancing and do it as safely as possible.’  At the same time it has been revealed that  British Chancellor Rishi Sunak is considering a VAT cut to stimulate spending, following concerns that social-distancing rules and anxious shoppers will keep sales figures low.  Furthermore, half of Britain's shoppers could avoid the high street in the immediate future, with four in ten spending less money than they did pre-lockdown, according to a YouGov poll for The Daily Telegraph.  Of course that statistic doesn’t reveal whether the majority six out of ten will be spending the same or even more to mitigate the drop.

The reluctance to spend might reasonably be attributed to loss of consumer confidence in what is now a global recession.  For those who lost their jobs as a direct result of Lockdown, their future is uncertain and it’s fully understandable they wouldn’t want to be splashing the cash on luxuries and non-essentials.  And surely anyone laid off – or ‘furloughed’, as became the government buzzword,  for those 3 and a half months would also be feeling the pinch?

Well, curiously not!  In a generous parachute package to staff forced to stay at home due to the closure of their places of work, the above-mentioned Sunak had offered those furloughed personnel a government hand-out amounting to a massive eighty percent of their salaries.  And with the closure of all places of entertainment  and the elimination of travel costs and other expenses such as  eat-in or take-out lunches, many employees have found themselves not only saving money during their enforced leave but saving money, i.e, salting some funds away in their bank accounts.  In other words, they found themselves financially better off,  being off  than on!  On that basis, then, they could be expected to be keen to splurge on the nation’s favourite pastime of retail therapy, particularly in view of the fact that stores including Zara, John Lewis and Debenhams have slashed prices by as much as 70 per cent in a bid to lure shoppers back. Desperate fashion chains are sitting on as much as £15billion (P225billion)  of unsold stock they are keen to shift.  

So it all boils down to a question of consumer confidence, rather than simple economics.  Whilst most of us will have rushed out to the shops as soon as they re-opened to purchase something the government might not have deemed ‘essential’ but which is certainly necessary to us as individuals, how may of us are actually prepared to lay out for a big-ticket item when the economic future is still so uncertain, not least of which the dreaded ‘second wave’, should it arise?

Only time will tell, but for all those redundant retail workers,  metaphorically if not literally left on the shelf, it might anyway be a sad case of too little, too late. 

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