Thursday 9 July 2020 2:56 pm

More than 5,000 retail jobs at risk as pandemic forces John Lewis and Boots to restructure

More than 5,000 high street jobs could be lost as two UK retail giants announced store closures today after the coronavirus pandemic forced John Lewis and Boots to urgently restructure their businesses.

John Lewis has decided not to reopen eight stores after the coronavirus lockdown, saying the sites were struggling before the pandemic. 

Read more: John Lewis closes eight stores putting 1,300 jobs at risk

The proposed closures, which includes department stores in Watford and Birmingham, have put around 1,300 jobs at risk. 

Meanwhile Boots is cutting 4,000 jobs, amounting to around seven per cent of its workforce.

Boots and John Lewis to close stores across UK

Unlike John Lewis, Boots was allowed to stay open throughout the lockdown as an essential retailer. 

But the pharmacy chain closed 100 city centre and travel hub opticians stores, as well as the chain’s revenue-driving beauty and fragrance counters. 

Meanwhile, a sharp drop-off in GP visits, as the public avoided putting extra strain on the NHS, led to a reduction in the demand for one-off prescriptions and medicines.

Retail sales plunged 48 per cent for Boots UK and 72 per cent for the opticians business in the third quarter, compared with the previous year. 

The coronavirus pandemic has exacerbated problems that have been mounting for years, forcing retailers to address them urgently. 

Both retailers today admitted that the shift to online, accelerated during the coronavirus lockdown, had been the final nail in the coffin for struggling areas of the business. 

Coronavirus accelerates retail changes

Unlike John Lewis, Boots was allowed to stay open during the pandemic, but months of lockdown have accelerated a shift to digital shopping
While Boots was allowed to stay open during the pandemic, months of lockdown have accelerated a shift to digital shopping (AFP via Getty Images)

Retailers have long been trying to adapt to consumers’ increasing appetite for online shopping while attempting to also keep a strong physical presence on the high street. 

The enforced coronavirus lockdown has sped up the process.

The latest footfall figures showed that consumers have not rushed back to the high street as shops reopened. 

Alongside the convenience of online shopping, some consumers are nervous about going back to crowded high streets, even with social distancing in place. 

Read more: Boots to slash 4,000 jobs and shut 48 shops

“We all need to adjust to the ‘new normal’ and, while there were queues for many stores when the high street was allowed to reopen, there are still many who refuse to leave the house unless absolutely necessary – and shopping in stores for clothing and home accessories isn’t deemed necessary to them,” Andy Barr, founder of price tracking website Alertr, said. 

Read more: Think tank: Furlough bonus scheme a £9bn ‘deadweight loss’

The news of the latest job losses comes after chancellor Rishi Sunak announced a plan to retain and create jobs yesterday

Retailers bemoan lack of VAT cut

Retailers would have been eligible to receive £1,000 pounds every member of staff they take back from the furlough scheme.

However, there was a lack of specific help for the sector prompting industry bodies to call for the VAT cut that was granted for hospitality to be extended to retailers. 

But there is a view that the restructurings have been a long time coming, with the pandemic forcing John Lewis and Boots to urgently address long standing issues. 

“The likes of John Lewis and Boots will exist in the future, but they cannot maintain their empires under their current structure,” Julie Palmer, partner at restructuring firm Begbies Traynor, said.

Read more: John Lewis to phase reopening of department stores from 15 June

“If they want to survive and thrive in 10 to 20 years then a sticking plaster will not suffice. They must restructure and rebuild their companies to make them stronger for their employees and their future.”

Neil Frith, senior market analyst at Ask Traders, added: “It’s tough, but we are beginning to recognise the same pattern – brands weren’t doing as well as they should have been before the pandemic, and now they are really struggling to hold themselves through it.”