With the prospect of more local lockdowns on the cards, Retail Week explores how retailers can manage and plan for an uncertain future.

  • Retailers warned to come up with local lockdown plans “to be rolled out in any city or location at a moment’s notice”
  • Sports Direct critical of Leicester lockdown, saying the government is “lurching from half-cocked plan to non-sensical policy”
  • ScS redeploys staff to nearby stores to support workers unable to go on furlough at short notice

On June 30, Leicester became the first city in the UK to go back into lockdown, affecting retailers across the region.

Stores on the non-essential list have been closed, while those permitted to stay open have faced difficult decisions about how to operate.

Residents have also been encouraged to stay at home where possible and avoid travel in and out of the city limits. 

The city and its surrounding area is a hub for retail headquarters, factories and is home to shopping destination Fosse Park, all of which have been affected by the lockdown regulations that will be active for at least the next two weeks.

As Leicester is unlikely to be the only area to be put in local lockdown, with 36 other regions potentially at risk, retailers need to prepare for what these regulations could mean for their strategy, colleagues and customers over the coming weeks and months.

“The focus to date has been on getting through lockdown and preparing to restart, but we always thought there would be some kind of second iteration, which we assumed would be on a regional basis,” says KPMG head of retail for the Midlands Simon Purkess.

“There’s a big difference between a lockdown that happened very quickly [in March] and took people by surprise, to the prospect of more local lockdowns as retailers know what it looks like and are able to prepare for it.

“It’s very clear that these spikes will happen so retailers need to come up with an executable plan to be rolled out in any city or location at a moment’s notice.”

To close or not to close

Local lockdown regulations stipulate that all non-essential businesses must once again shutter their doors, but that those deemed essential may remain open.

Superdrug Fosse Park

Only essential retailers can open in Fosse Park retail park

In reaction to the new local rules, head of operations for The Crown Estate, which operates Leicester destination Fosse Park, Jo Francis said: “Following government advice for Leicestershire, non-essential retailers are currently closed at Fosse Park. Stores including Marks & Spencer, Boots and Superdrug remain open for essential items. 

“Health and safety remain our highest priority and we will continue to work closely with our customers, visitors and staff to ensure the appropriate steps are being taken to help safeguard all those on-site. We are monitoring the latest public health guidance closely and will keep our visitors updated as the situation evolves.”

While grocers and pharmacies will remain open, home and DIY retailers, which are classed as essential, only started to reopen their doors a few weeks ago.

Homewares retailer Dunelm has made the decision to continue trading in its Leicester store as per government guidelines with social distancing measures in place.

Sofa specialist DFS, on the other hand, has closed its Fosse Park store “to allow us time to review the situation locally and consult with our colleagues”.

Closing so soon after reopening is a difficult decision as it requires displacing colleagues who may have been been on furlough and may exacerbate the impact on sales already seen throughout lockdown.

Communication is key to any decisions retailers need to make for the good of their operations and their customers, however.

Classed as non-essential, Dixons Carphone has begun contacting its local customers to offer guidance on their orders.

“Once again many industries, including retail, get very little time to react and very vague guidance at the same time”

Chris Wooton, Sports Direct

A spokesperson for the retailer said: “In line with government guidance, we have not opened our stores in Leicester from June 30. There is no bigger concern for us than colleague and customer safety and we will continue to monitor the situation closely. We are contacting customers who have outstanding collections from the stores, or planned installations and deliveries in the area to make alternative arrangements.”

Sports Direct, which is also on the non-essential list, has criticised the local lockdown measures and asked for its stores to remain open as it sells bicycles and other sports equipment that could be deemed essential.

Sports Direct finance boss Chris Wooton wrote in a letter to the government: “Once again many industries, including retail, get very little time to react and very vague guidance at the same time.

“Retail specifically is in critical condition, even before the start of the Covid-19 crisis. The continued bumbling and lurching from half-cocked plan to non-sensical policy is making things far worse.”

Sports Direct expressed similar views about the full UK lockdown in March but its request to remain open then was denied.

The limits of furlough

Clear communication with staff is also essential to ensure they are not negatively impacted by local lockdowns.

Prior to reopening, retail staff across the country were furloughed through the government’s job retention scheme.

However, the scheme stipulates that businesses must give at least 48 hours notice to put staff back on furlough and they must have been on the scheme for a minimum of three weeks.

In the case of Leicester and future local lockdowns, retailers would therefore not be able to take advantage of the government scheme so must allow for other plans.

Furniture retailer ScS, which also made the decision to close its Fosse Park store this week, has redeployed its staff to other nearby stores where possible and where staff are comfortable to do so.

Purkess says this idea could work where retailers have multiple stores nearby but will be more difficult if the store estate is more limited or spread out.

“There are practical implications for how it could work,” he says. “But tools are starting to come into place which could help. Apps that could track and trace where staff are and where they live will be crucial to understanding who is actually available or affected by regional regulations.”

He also adds that internal communications will be essential to ensure that all staff are prepared for lockdowns in any location, so any plan can be rolled out smoothly and efficiently.

Supply chain management

While much scrutiny will be on the stores themselves, local lockdowns may also affect factory operations and workers, which in turn have an impact on retail supply chains.

Leicester market

Leicester is the first UK city to be told to lock down again

Over the weekend, Boohoo faced allegations of modern slavery in a Leicester warehouse which Boohoo has said it will investigate, although it claims the business is not a ‘direct supplier’.

Prior to these allegations the fast fashion retailer said that it works with suppliers in Leicester and while it has not ceased operations, it has set out guidelines for them to work by.

“Since the onset of Covid-19, we have had to fundamentally change the way that we operate and we continue to closely monitor the guidance provided by the UK government,” a Boohoo spokesperson said.

“Whilst the most updated guidance from the government in regards to Leicester does not require online businesses or manufacturers to close, we would only continue to operate with suppliers in the region if we were confident that we could do so safely; our priority as always is to protect the safety and wellbeing of everyone who produces garments for us. We have also given our suppliers access to ample supplies of free PPE and hygiene products for their staff.

“Our CEO, John Lyttle, has written personally to every supplier sharing details of the measures that Boohoo has taken and set clear expectations about the actions that they should take to protect and act responsibly towards their employees.” 

“Retailers shouldn’t be ordering on historic or expected patterns, as no one knows how many lockdowns will happen and where”

Simon Purkess, KPMG

Government guidelines are yet to close down distribution centres or factories, but retailers should ensure that their entire ecosystem maintains health safety regulations.

Purkess also suggests that retailers may be able to re-route inventory from store to store or distribution centre to distribution centre should lockdown have an impact. 

“Retailers shouldn’t be ordering on historic or expected patterns, as no one knows how many lockdowns will happen and where,” he says.

“They need to be using their forecasting tools to reflect the fact that the whole estate won’t be able to be open at any one time.

“Those who plan, however, now have the ability to move stock that’s at risk of going out of date or out of season to be sold in other stores nearby – something that wasn’t possible during full lockdown.”

While no retail head offices are directly inside the affected Leicester zone, Next’s headquarters lie just outside. 

Next High cross leicester

Next has set out guidelines for its staff in Leicester and the surrounding area

Next has set out guidelines for its head office workforce in Enderby, which ordinarily has 3,500 people on site.

Due to coronavirus regulations including the two-metre rule, which Next has not reduced to one metre despite relaxed rules, only 500 are in the building each day on rotation.

Next has specified that any worker that lives outside Leicester may continue to go to work on their allocated day as they have done over the past few weeks, whereas anyone living inside the affected zone will work from home unless it is absolutely necessary for them to travel to the office.

Staff living inside the zone have also been instructed not to use public transport if they do go into work. 

Retail head offices across the country have chosen different ways of working, including full home-working operations for some

Should local lockdowns be put in place elsewhere, particularly in London boroughs, head office staff may need to return to or remain working from home. Retailers must also prepare for the possibility that rotation plans may also be affected.

Preparing for future lockdowns

With 36 other locations on the hit list for potential local lockdowns and other cities at high risk of local lockdowns, including Bradford, retailers should not treat Leicester as a one-time occurrence. 

ScS says it has already created a temporary closure and reopening procedure and has this ready to deploy across the network, if and when it is needed, and others would be wise to do the same.

KPMG’s Purkess recommends that retailers would be best to create a “blueprint” to be rolled out to any location at a moments notice. 

“If you’ve got a blueprint for what to do with the store, the staff, the inventory, the head office or the local distribution it means there’s always a plan that can be replicated in any geographical location. It just depends on what sort of retailer you are as to what the details of the plan are,” he says.

For all retailers, having a reactive and adaptable plan in response to local lockdowns will be essential to navigating the next stage of the crisis.