In the third part of its Back to Business series, ICAEW Insights explores the toll COVID-19 has taken on retail and how the sector plans to recover as we move along the government’s roadmap out of lockdown.
Jonathan Whitwam, CFO of multi-label wholesale showroom Rainbowwave, says through the course of the pandemic retail has “taken a battering” and has required “a total rethink of the model and movement to online” to survive COVID-19.
“I think at best, by taking dramatic action such as cost-cutting, landlord negotiations and cashflow management, many businesses will consider themselves fortunate to break even in the pandemic year”, said Whitwam.
Roadmap reaction
As laid out in the government’s Roadmap out of lockdown, non-essential retailers can open their doors from 12 April at the earliest. They will be allowed to stay open until 10pm at the latest from Monday to Saturday in a bid to spread out shoppers and avoid congestion.
Commenting on the roadmap, Whitwam said: “I think this is too slow: non-essential retail could probably open right now with COVID restrictions and people could go shopping quite safely. If you go to Tesco, Sainsbury’s or Waitrose, or whichever, they’re full of shoppers. I think there is no reason to hold back on non-essential retail.”
Sector support during the pandemic
“I think in the first six months the support was game-changing. After that, you have to make tough decisions in order to survive. We came out of the furlough scheme in September/October and we had to make decisions about the business strategy going forward.”
He added: “Furlough, rates relief, bounce back loans were good and CBILS was a good option but there is a point in time when we have to say let’s stop and actually deal with where we are. To keep pushing back on a macroscale and putting the government into even more debt just seems remarkable to me. But the help was certainly appreciated.”
UK government spending on COVID-19 measures pushed the UK debt past £2tn back in August 2020, £227bn more than at the same point last year, according to the Office for National Statistics (ONS).
Not just about the numbers
One factor Whitwam credits with helping him and his business through the past 12 months is his ACA training. “It’s good because it’s not just about numbers - it’s about the business and the strategy to keep things moving. When you get a crisis of this magnitude and everyone in the business is trying to come to grips with what is going on, the chartered accountant qualification allows you to say ‘let’s look at the facts, assess the different options, set our position and decide which one we want to go with’. We did exactly that 12 months ago.”
He continued: “When I go back 20 odd years to when I was initially training, you dip in and out of several different businesses and you look at a lot of issues. It trains you to look at different circumstances from an independent point of view and that puts you in good stead for the future. You can look at the facts in hand and deal with them with a fairly calculated mindset.”
What’s next for retail?
The Rainbowwave CFO firmly believes that the retail sector is set for a strong comeback, as he is seeing signs of pent up demand from a recent boost in sales the business has experienced.
“I think there is going to be a huge boom, a huge bounce-back. I would say recovery is going to be u-shaped seeing as it’s gone on for so long. In the last three months, our sales have significantly improved. People keep asking when they can come in and when they do, what can we recommend for them. It’s people who just want to shop”, he concluded.
- Visit the three-part “Getting back to business after lockdown” landing page
- Back to Business part 1: travel and tourism
- Back to Business part 2: hospitality
- ICAEW’s COVID coverage
- For insight, support, and guidance for those working or advising in the online and offline retail sectors join the ICAEW Retail Community for free.