Frasers Group, the parent company of the Sports Direct chain, was the first major retailer in the U.K. to withdraw its guidance for its current financial year after the government, on Dec. 19, ordered the shutdown of all stores selling non-essential products in London and Eastern and Southeastern England. They joined those in Wales because of the sharp spread of a new mutant version of the Covid-19 virus in those regions, where 16.4 million people live. Scotland and Northern Ireland will follow suit from Dec. 26. Frasers had predicted an improvement of 20 to 30 percent in its Ebitda for the year.
The government of the Republic of Ireland, which was the first country to order a second lockdown in October, has decided to keep only some non-essential stores open from Dec. 24 to Jan. 12, and to delay the winter clearance sales afterwards.
In the U.K., where the situation is complicated by uncertainty over its future trade relations with the European Union, the duration of the lockdowns will depend on the rate of infection and hospitalization. Some pessimists fear that they could last until the new vaccines have a significant effect on the population, maybe not before Easter. Anyhow, according to the Confederation of British Industry (CBI), the retail picture is likely to be “bleak” in January because of the deteriorating labor situation.
A temporary suspension of this year’s second ban on non-essential retailing in the U.K. on Dec. 6 gave a lift to retailers of furniture, jewelry and other items, but department stores and clothing and footwear shops continued to report lower volumes than a year ago. Online sales continued to progress, rising by more than 50 percent year-on-year, but many products ordered online are expected to be returned at the beginning of January, partly because some families will be unable to meet to exchange Christmas gifts.
Online traffic increased sharply in Germany after the federal government ordered a new retail lockdown from Dec. 16 to at least Jan. 10 for all non-essential retail stores, with some exceptions, such as bike repair shops. Contactless click & collect, which was forbidden during the first lockdown in the spring, will be permitted this time.
In contrast with last spring’s lockdown in Germany, when much internet traffic was limited to browsing for new offers, the new internet spike is expected to result in much higher sales of products that customers might have otherwise bought at physical stores.
Anti-Covid restrictions have also been tightened in Denmark, where the government decided on Dec. 16 that all shopping centers should be closed. Elsewhere, non-essential retail stores will have to stop operating from Dec. 25 to at least Jan. 3. Sports clubs will also stay shut.
Shopping centers were previously closed in Spain, but they have been reopened in the autonomous region of Catalonia. In Italy, shopping centers are also being kept closed in certain “red zones” from Dec. 5 until Jan. 15. Non-essential stores and ski-domes have been ordered closed from Dec. 16 to Jan. 17 in the Netherlands.
In general, retailers have expressed anger at being given little notice before the new shutdowns. In Germany, Intersport joined some important fashion retailers in warning about the serious consequences of the lockdown in an open letter to politicians published in the Welt am Sonntag newspaper. It said that such a decision will necessarily lead to the insolvency of thousands of retailers and the loss of millions of jobs, particularly in city centers.
The German retailers’ federation, HDE, called for equal treatment with restaurants and bars, which will remain closed, and the transformation of soft loans offered by the government to compensate for fixed costs and sales losses into non-refundable grants. For the time being, the German government has agreed to make it somewhat easier for retailers to obtain lower store rental fees from their landlords. In the U.K., the British Retail Consortium is pleading for an extension into 2021 of a current exemption from business rates, which are special taxes levied by the government on store rentals.
In Italy, the Oberalp Group said it will not start winter clearance sales until Jan. 30 at its 58 stores in the country and elsewhere in Europe in order to ensure a maximum of sales at full price for the current season. The parent company of Salewa and other brands gained the support of the Italian Outdoor Group, but different dates are being set for the end-of-season sales in different regions of the country.
The winter clearance sales have already been postponed until the end of January for the benefit of independent retailers all over France, where non-essential stores reopened on Nov. 28 and should remain open, but the recommendation has been criticized by some large retail chains.
Winter sports facilities open and close
Meanwhile, ski resorts have reopened in certain parts of Spain, notably in northern Catalonia and the Sierra Nevada, with some restrictions in terms of capacity and access. In the Sierra Nevada, ski passes can be ordered only over the internet, with traffic limited to 6,000 people at a time to avoid infection in the cabins. In Catalonia, only people living in neighboring municipalities or owning a house in the mountains will be able to use the ski lifts until Jan. 11. Hotels and restaurants will stay open in the Spanish ski resorts to accommodate tourists, but they will be allowed to operate at only half their normal capacity.
As previously reported, the government of Andorra, which borders on Catalonia and France, has ordered the shutdown of its vast ski areas, partly in solidarity with the French government, which is banning the use of skilifts and cable cars until Jan. 12. To soften the blow, French authorities have authorized exemptions for ski professionals and youngsters who have registered for ski lessons with a certified ski school. Similar policies are being followed in Italy.
In Austria, where ski areas are opening again for locals on Dec. 24, ski schools are not permitted to operate until Jan. 12, and the number of passengers in closed ski cabins will be limited to 50 percent of normal capacity. Hotels and restaurants will remain closed until at least Jan. 17. Ski rental shops will stay closed, but they will be permitted to offer click & collect services.
Until a few days ago, Switzerland was the only country in Central Europe where, aside from various sanitary measures, skiing was permitted as before. The Swiss government decided in fact on Dec. 4 to keep the country’s ski resorts open during the holidays, but in the last few days, nine of its 26 cantons – starting with Andermatt – decided to close them in view of a rising number of infections.