The decision comes only two weeks after the end of the last national lockdown and is right in the middle of peak trading which so many are depending on to power their recovery

The decision comes only two weeks after the end of the last national lockdown and is right in the middle of peak trading which so many are depending on to power their recovery

Clothing retailers in parts of the UK have been dealt a devastating blow in the run-up to Christmas as the government announced new Tier-4 restrictions that will see non-essential retail closed, a move which experts estimate will cost them GBP2bn (U$2.66bn) in sales per week.

On 19 December, the UK government stepped up emergency measures to respond to a new Covid strain, thought to be up to 70% more infectious than the first. As part of these measures, Tier-4 restrictions were announced for all 32 boroughs of London, Kent, Buckinghamshire, Berkshire, Surrey, Bedford, Essex, Hertfordshire, Milton Keynes, and Luton among others.

It means mixing across the five days of Christmas would be banned, with Christmas bubbles only allowed to meet on 25 December and non-essential travel advised against. Notably, it would see the closure of all non-essential shops in Tier 4 areas, during what would have been their busiest period.

Helen Dickinson, CEO of the British Retail Consortium (BRC), said the move was "hugely regrettable", particularly as retailers had invested hundreds of millions making stores Covid-secure for customers and staff.

"The consequences of this decision will be severe. For businesses, the government's stop-start approach is deeply unhelpful – this decision comes only two weeks after the end of the last national lockdown and right in the middle of peak trading which so many are depending on to power their recovery. Faced with this news – and the prospect of losing GBP2bn per week in sales for the third time this year – many businesses will be in serious difficulty and many thousands of jobs could be at risk.

"The government will need to offer additional financial support to help these businesses get back on an even keel – an extension to business rates relief in 2021 is the best place to start."

Richard Lim, the CEO of Retail Economics said it would be a "crippling blow" for non-essential retail in the final days before Christmas.

"Thousands of retailers are hanging on by a thread, hoping to trade through these vital days before Christmas to strengthen their financial positions after months of disruption. It is essential that adequate Government support is provided for an industry already on its knees.

"For many shoppers, a last-minute rush to order presents online will come too late as retailers struggle to cope with the sheer volume of orders. Online capacity has already been exceeded for many retailers and a last-gasp attempt for some is likely to push operations beyond their limits." 

Frasers Group, which owns Sports Direct, Flannels and House of Fraser withdrew its financial guidance today (21 December), with the closure impacting "virtually all" of its stores in the areas.

"Given this is a peak trading period, and combined with the high likelihood of further rolling lockdowns nationwide over the following months at least, such is the uncertainty of when stores can and cannot open that the board of Frasers Group Plc can no longer commit to Frasers Group achieving its publicised guidance of a 20% to 30% improvement in underlying EBITDA during FY21 and, accordingly, is withdrawing its guidance."