Economic recovery gathers pace
This week welcomed the highly anticipated return of indoor drinking and dining, with the latest easing of the Covid-19 lockdown providing a much-needed boost to the hospitality sector and the UK economy more widely.
UK Hospitality estimates that more than 52,000 venues employing approximately 900,000 people reopened this week, adding to the portion of the sector already open for outside trade (26,000). In addition, 12% more tables were booked on Monday than any other date since July 2020, according to The Fork (formerly Bookatable).
However, this renewed flurry of spending and financial activity did not extend itself to the retail sector, with fewer people visiting shops and heading to UK high streets; the number of people visiting shops was down by 3% compared with the same time a week earlier. Some may attribute the decline in footfall to the erratic and unseasonal weather we have been experiencing, but this in no way can account for the significant change in footfall compared to the equivalent Monday in May 2019 before the pandemic, when it was 28.4% higher.
Adapt to survive
Ecommerce has seen a significant boom over the course of the crisis, and consumer preference for online shopping is clearly a trend that is here to stay. Arguably, the various lockdowns have merely accelerated a shift that had already been materialising, with many bricks and mortar outlets pivoting to online and an increasing number of digital marketplaces emerging, joining the well-established giants of this space (Amazon, Google) such as Fruugo and OnBuy.
High street retailers will need to adapt and utilise technological advancements to survive, with virtual dressing rooms and showrooms deploying smart technology examples of how offline retailers might seek to retain and attract consumers.
Further clouding the horizon of the hospitality and retail landscapes, many business leaders are concerned that the rapid spread of the new Covid-19 Indian variant in some parts of the country will mean that the government will not reduce the need for social distancing and other restrictions on the 21st June. This would further set back recovery plans, with any potential reversals predicted to cost more jobs, and further stalling could be financially devastating for those forced to operate at reduced capacity in order to meet requirements.
Employment opportunities on the rise
However, elsewhere this week, it was encouraging to see signs of UK job market resilience, with the ONS reporting early indicators of recovery. The unemployment rate fell marginally to 4.8% in the three months up to March, and UK job vacancies are at a record high since the start of the pandemic, with the easing of lockdown leading to increased recruiting from employers.
While we still have a long way to go before vacancies reach the levels seen pre-crisis, employment was up for the fifth consecutive month. It is inevitable that some further job losses will occur as the furlough scheme unwinds, but the restarting of businesses is predicted to help counter this, leading to multiple new hires. As we continue to gradually recover, government and businesses will be crucial in ensuring the roll-out of retraining initiatives, helping to avoid skills shortages.
Specifically, the ONS noted that both the employment and unemployment rates of young people had fallen in the past quarter, suggesting that this cohort were staying in education without looking for work. The pandemic has clearly stalled the career paths of many graduates and school leavers, and hopefully the recent rise in vacancies will start to re-widen the options and opportunities available to this age group.