Dr Steven McCabe, regional economist at Birmingham City University has described the announcements by John Lewis Partnership and Boots PLC as devastating, but suggests the UK may see a resurgence in local independent shopping as a result of the Covid-19 economic crisis.
“The announcement by John Lewis Partnership and Boots of, combined, up to 5,300 jobs are to go across the two companies is devasting; particularly for those who will lose their jobs. It tells us much of about the lack of confidence there is in the economy and people’s willingness to spend.
“John Lewis has always been regarded as a bellwether of retailing and did well even during the financial crisis of 2008. However, Covid-19 has exposed the fault lines in retailers who were already trying to cope with reduced consumer spending and the increasing threat of cheaper online providers.
“The British have fallen in love with online retailing. It offers goods cheaper and more safely than having to visit a shopping centre or the high street which, in a pandemic, is more attractive to shoppers. What Covid-19 has cruelly exposed, is our dependence as an economy on consumption and the service sector.
“As people may not want to travel so far to shop, one positive may be a resurgence of local shopping and an increase in independent traders who sell bespoke products and locally sourced food. This would be good for us as a society, maintain jobs and be crucial in a ‘greener’ and more sustainable economy.
“However, make no mistake, times will get tougher for retailing. The most pessimistic projections are that up to 50% of retailers may disappear as a result of the economic conditions we’re experiencing.
If, as feared, unemployment rises rapidly, people will be more reluctant to spend which creates the dreaded vortex of decline that leads to reduced demand and further job cuts. It’s essential that we see more assistance from the government to support continued employment and invest in jobs for the future.”