Monday 20 July 2020 6:08 am

DEBATE: Is Rishi Sunak's job retention bonus scheme the right strategy for supporting the retail sector?

Helen Dickinson OBE is chief executive of the British Retail Consortium
and Andre Hordagoda
Andre Hordagoda is co-founder and chief executive at Go Instore

Is Rishi Sunak’s job retention bonus scheme the right strategy for supporting the retail sector?

Helen Dickinson OBE, chief executive of the British Retail Consortium, says YES.

The job retention bonus will provide welcome support as retailers think about future requirements and bring back thousands of staff over the next few months who have been on furlough. 

Many stores have been shuttered over the last four months, with sales of some non-food items collapsing by over 50 per cent. The bonus of £1,000 per employee retained will provide an extra incentive for many retailers to hold onto staff that they may have previously planned to let go once furlough ends.

However, ongoing store closures and job losses demonstrate the need for further support. Consumer confidence remains low, and ministers must stand ready to help boost demand, for example by extending the VAT reduction already granted to hospitality. 

Furthermore, the bonus will become redundant unless shops remain open — otherwise the very jobs it seeks to protect will be lost. This requires government intervention on the rent burden, which has been accumulating, and on business rates so that next spring’s “reverse cliff edge” — the re-instatement of 100 per cent business rates — is avoided.

Read more: Flexible thinking has got small businesses through this crisis — now we can shop local to support them

Andre Hordagoda, co-founder and chief executive at Go Instore, says NO.

The reality is the government’s bonus scheme won’t help save retailers in the long term. Although it will support staff now, retailers won’t have enough customers coming to stores to make the investment worth it. 

Lockdown has completely transformed the way we shop — there is no real need to go to a physical store when delivery options are so efficient and technology can facilitate online experiences that are as effective as store visits.

Supporting brands bringing back staff is also a health concern. According to recent research, retail workers are up to 75 per cent more likely to die from Covid-19 because of their daily exposure. With the government strategy focused on increasing footfall in stores, retail staff will become even more vulnerable to catching the virus.  

Instead, the government needs to shift its focus on helping businesses adapt to the new retail landscape. To do this, we need funds for innovative solutions that keep employees working safely and remotely — for example, through live video engagements with in-store experts or augmented reality. Innovative offerings will ensure retailers can drive sales whilst keeping staff safe and focus on long-term job security. 

Get City A.M.’s views on what lockdown means for politics and business delivered straight to your inbox every day.

Main image credit: Getty

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

Share: