“The high street will continue to suffer and pay the price of lockdown, even after it is lifted,” Alex Jay, Head of Insolvency at Stewarts law firm said
The downfall of Britain’s high streets? John Lewis and Santander close down branches amid digital shift
With the nationwide lockdown still in place, Britain’s high streets have faced mass store closures amid the pandemic. John Lewis announced plans to permanently close eight more shops, putting 1,465 jobs at risk. The lockdown has also brought about a digital shift as more customers are moving online. Santander has closed 111 branches across the UK in response to a rise in digital banking.
Santander will close four on-site locations and its UK headquarters will shift from London to Milton Keynes, affected about 5000 staff members. In addition, all the current business account holders with Santander would still be able to bank in person at more than 11,000 Post Office branches. Santander said the pandemic has caused a massive change in customer habits, with branch transactions dropping by a third over the two years before the onset of the pandemic and a further 50% last year. Four branches in London and one in Glasgow will shut down on June 24, and all 111 will be closed by the end of August.
Retail giant John Lewis will be closing eight of its stores once lockdown eases, as the shops were “financially challenged prior to the pandemic”. Four "At Home" shops in Ashford, Tunbridge Wells, Basingstoke, and Chester will close - as well as department stores in Aberdeen, Peterborough, Sheffield and York. The retail giant has now axed around a third of its stores in less than a year. However, the company said it planned to invest in improving its click-and-collect in Waitrose stores and offer more local collection points to allow customers to access its products. John Lewis said in a statement: "In areas where we propose not to reopen stores, we will look at the right combination of options for that location to ensure we remain convenient for our customers, so they can continue to access John Lewis products and services."
Many of the big banks have cut their branch networks as customers deviate from traditional banking services in favour of online and digital banking. The digital shift has already taken place in recent years. However, many say the pandemic has sped up the process with a mass digital revolution occurring in multiple sectors. According to the consumer body Which?, banks and building societies have closed or announced the closure of 4,188 branches since January 2015, averaging around 50 each month. Gareth Shaw, Which? head of money, said: “The bank branch network continues to shrink at an alarming rate, often leaving entire communities without somewhere to withdraw cash or speak to someone face-to-face about sensitive financial matters.”
Some businesses believe that even as Covid restrictions ease up, there will be more aggressive restrictions in the retail and banking sector – and that the high street will continue to suffer and pay the price of lockdown, even after it is lifted. “As the Covid restrictions ease, the change in retail and hospitality premises use will come firmly under the microscope, as we have seen here with companies like John Lewis, Santander and Thorntons,” Alex Jay, Head of Insolvency at Stewarts law firm. “It will be a zero sum game for many other businesses in a similar or even more challenging position, some of whom may have to reduce space or face insolvency – which will drive more aggressive stances being taken, and inevitably disputes. The question is whether the landlord, or the tenant company, will come out on top.”