How is the independent retail sector handling the impact of Covid-19?

March 23rd 2020 is a date of infamy, particularly for independent retailers. As the first lockdown started many businesses had to close their doors and are not expected to survive.

How is the independent retail sector handling the impact of Covid-19?

March 23rd 2020 is a date of infamy, particularly for independent retailers. As the first lockdown started many businesses had to close their doors and are not expected to survive. 

Whilst the predicted 235,000 retail job losses also includes the big retailers that have gone under, there will be a significant number coming from independents. 

The current lockdowns are piling on the pressure.  Given this let’s review how Covid-19 has impacted independent retailers and what changes has it forced upon the sector.

A different mindset

The consumer’s mindset has become dominated by “virus- consciousness”. Many are wary of shopping on the high street, fearful of catching the virus. One recent report says 20% of people won’t ever return to the high street for clothes buying. 

Retailers have sunk money (which they won’t see back) into Covid protection measures. And, as the pandemic has continued, they’ve had to be more lenient about the flouting of social distance rules or risk losing that trade. No retailer wants customers to catch the virus, but no retailer wants to go bust either. 

Original Furlough

The government’s furlough scheme has provided much needed funding to many businesses. Wholesale and retail businesses were hardest hit, with 1.1m businesses claiming over £3.3bn for 1.6m staff.

The impact on independent retailers was significant. Whilst the furlough funds meant they didn’t need to make staff redundant, the inflexibility of the early furlough programme meant that many tasks were put off. Perhaps chief amongst these was marketing activity. We saw many retailers struggling to update their information on our website. Whenever we called them, the response was “I’m on my own, trying to get everything done”.

However, some retailers managed to avoid using furlough and quickly made the switch to online. The staff took phone orders and then handled the packing and shipping of these phone and online orders. Keeping the sales flowing, the business afloat, and the jobs intact. 

Furlough Rule Changes

The changes to the furlough rules, particularly now we are in another lockdown, have created behaviour changes. Retailers are now catching up and looking at their marketing and what they need to do over the coming months. In many ways these nimble retailers have learnt the lessons of the previous lockdowns and are much better prepared. 

Adapting & Evolving

During lockdown 1 there was a 60% increase in online sales, so retailers will have to adapt. We don’t believe all sales should move online; physical stores are still a vital part of the UK economy. We help independent businesses to sell online, but they have to have their own bricks & mortar ‘high street’ shop too. 

In recent months, over 100 new independent retailers have started using our platform. Our customers have seen revenues increase, in total 30%, month on month. Shutting your physical stores during lockdown does not mean that sales have to shut down as well.

The independent retailers that adapt will be the ones that come out of 2021 the strongest. 

What else is impacting the independent retail sector?

Excess stock

With products leaving the shop much more slowly, independent retailers have huge amounts of cash tied up in stock. This stock needs to be sold to enable supplier payments – and, of course, to allow the retailer to pay themselves.

To release this cash, alternative sales channels are needed, or it will probably mean having to discount stock. For example, many businesses started their Winter/Black Friday Sales much earlier than usual. Particularly in the fashion industry, this stock has to go. If it doesn’t, it simply cannot be sold as the season changes. So, look for alternative channels, online is a key option here, and if necessary get discounting. No one likes to do it, but sometimes some money in is better than stock on the shelves. 


Some landlords have been coming down hard on retailers and demanding their rents. Although the government has helped protect retailers from being evicted by their landlords, the debt will continue to grow and will have to be paid at some time. 

Not every landlord takes this approach. We’ve heard stories of landlords, on the day the second lockdown started, calling tenants to offer rent discounts!

If you are struggling, it’s always best to contact your landlord and see if you can work out a discount or payment holiday. 


Suppliers have to be paid. We’re not arguing that, but there are lots of stories of suppliers demanding payment, often with penalty increases being applied if payments are late. This increases a retailer’s stress levels and may distract them from focusing on keeping the business alive.  As with landlords, if you are struggling to pay your suppliers – speak to them. Many will be sympathetic if they know you’re genuinely trying to pay. 

What is more positive for the independent retailers?

Clearly once the vaccinations programme is giving hope to many independent retailers, though we can’t be sure how long it will take for the impact to be seen on the high street.

However, the “Shop Safe, Shop Local” campaigns have had an impact and are increasing the numbers of consumers purchasing from local, independent retailers.  We also believe that, particularly for product where touch and feel are important, that shoppers will want to get back into shops.  This will be enhanced by customer loyalty. We are social animals we enjoy it when a retailer recognises us and offers loyalty benefits. Retailers should go out of their way to keep their loyal customers.

Loyalty, however, isn’t only relevant to offline. Many companies provide online loyalty programmes, for example, HTK. By collecting customer data and combining it with their purchase data, retailers can encourage more sales through personalised communication and offers.

For retailer moving online there is support from e-commence platforms such as Wix and Shopify. These allow businesses to start using them for a free trial period.  At DownYourHighStreet, we’ve removed the monthly fee for new customers and they pay a 15% commission on sales.

In addition, not everyone has experienced a drop in income. Those who have saved commuting costs by working from home, and who are spending less in restaurants etc are starting to spend their money elsewhere to the benefit of retailers.

Independent retailers will continue to feel the pressure from Covid-19 for some time and it’s legacy will be with us for many years.  The key for indie retailers will be their flexibility and ability to adapt. Those who can make the most of the consumers’ willingness to use online shopping will be the retailers whose business recovers soonest.

Daniel Whytock
Daniel Whytock

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