Danny Shahid defied the doom and gloom on the high street and opened a flagship store in London’s Mayfair last month for his luxury watch business.
Days later, as the capital entered Tier 4 restrictions, Shahid “was devastated at being forced to close” alongside 168,448 other shops up and down the country to help curb the spread of infections.
For many retailers things will get worse before they get any better.
“January is an important time of the year,” says Erin Brookes, who leads the retail team in Europe for Alvarez & Marsal.
“They need to clear everything for spring-summer. Having stores shut is a logistical nightmare and another month of lost income.”
Primark, typically one of the more resilient names on the high street, has already warned that it will lose £650m in sales while its 253 stores are currently shut.
Brookes expects retailers to place the most conservative orders for new stock from suppliers in more than a decade.
“The economy had such a wobble and consumer confidence is really low. They’ll want to mitigate against the downside risk if it [the market] doesn’t bounce back.”
The support from the Government is set to end despite pleas from shopkeepers and hospitality bosses to extend measures. A VAT cut and the business rates relief finish on March 31. The furlough scheme, which has already been extended, is set to close a month later.
Even with the mass rollout of a vaccine programme under way, the enduring restrictions are set to impact on the economy well into 2021.
The high street shed 177,000 jobs in 2020 with a further 200,000 expected to be lost this year, according to the Centre for Retail Research. Debenhams, the Edinburgh Woollen Mill brands and Sir Philip Green’s Arcadia were among 2020’s high-profile casualties, with more to follow.
The more vulnerable, says Brookes, are brands that sell work clothes and outfits for parties or weddings.
“I doubt that people will really want to go back working five days a week in the office. Workwear is not structurally dead, but the sector will be troubled for a longer period of time.”
The sector, however, should be able to look ahead to a brighter outlook in the second half of the year, according to KPMG/Ipsos Retail Think Tank (RTT), with sales growth expected between flat and 3pc up for the year.
Pent up savings and demand should assist a recovery, albeit it will likely favour discounters and businesses whose prices are competitive, mirroring consumers’ behaviour after the financial crisis.
On the grocery front, while matching the performance of 2020 is unlikely, supermarkets’ tills will continue to ring.
Mike Watkins, head of retailer and business insight at Nielsen, says: “With sales growth of 8pc in 2020, food retailers have been the big winners of reshaped consumer spending.
“We are expecting growth of between 2 to 4pc next year, but that will be dictated by a number of factors including how much of the reduction in hospitality continues to shift to food retail, which is still a big unknown.”
Watkins believes that restaurants, pubs and bars will be front of the queue to benefit from an initial surge in demand as restrictions are gradually relaxed.
More businesses, including those who were caught off guard by the boom in online shopping last year, will try to keep pace with evolving consumer expectations.
Investment from retailers in technology will continue to increase, and will pivot from store openings and refurbishments, to the back office and fulfilment centres.
James Sawley, head of retail and leisure, at HSBC says: “The investment into much publicised technology such as delivery drones and in store robots to count products and assist customers is overplayed and I don’t expect it to be required.
“Retailers should instead be seeking out technology that drives efficiency and improves margins, and I expect most to be looking at investment into AI and automation within their warehouses and supply chains.”
The convenience of local shops and high streets will continue to be popular among consumers, especially among those who still feel hesitant to travel into major city centres.
More than half (51pc) of UK consumers are actively looking to support local independent businesses in the future, while more than a third of consumers have already started to do so since March, data from e-commerce giant Shopify showed.
“Commerce has become so much more than a transaction,” said Shimona Metha, head of Europe, the Middle East and Africa at Shopify.
“It is an interaction between a business and its customers, and that will become more and more apparent. Those who fail to adapt will undoubtedly be left behind.”
Younger consumers are more likely to shop locally than middle-aged and older consumers as well as wealthier households.
Britons have said the main reasons for supporting independent firms last year was because they experience good customer service compared with more established players; they want to support entrepreneurs, and because it has a positive impact on society.
Around 91pc of consumers have shopped online in the six months since March, of which 5pc placed an online order for the first time.
This trend is likely to bring to the fore a host of new names and offerings.
Alvarez & Marsal’s Brookes believes that firms that “have a great relationship with their customers and provide something special” are set to thrive.
This year will be a tale of two halves. While the first months of 2021 are likely to see more pain on the high street, retailers should be cautiously optimistic about the summer months and beyond.