UK sheds thousands of retail jobs despite state aid

Agence France-Presse . London | Published: 22:45, Jul 10,2020

 
 

A picture shows the Boots signage outside a branch of the retailer and pharmacy in London on July 9. British pharmacy giant Boots and UK department store group John Lewis said on Thursday that they would axe at least 5,300 jobs. — AFP photo

British pharmacy giant Boots and UK department store group John Lewis said on Thursday that they would axe at least 5,300 jobs, despite government efforts to safeguard employment during the coronavirus pandemic.

US-owned Boots said that it would shed more than 4,000 roles after Britain’s lockdown slashed sales.

John Lewis meanwhile said that it did not plan to reopen eight stores forced to shut because of the lockdown, affecting 1,300 jobs.

During the pandemic, thousands of Boots and John Lewis staff have had up to 80 per cent of their wages paid for by the UK government under the state’s furlough scheme, which finance minister Rishi Sunak has said must end in October.

Replacing the scheme is a stimulus package worth £30 billion ($37 billion, 33 billion euros) unveiled on Wednesday by chancellor of the Exchequer Sunak.

The new measures include bonuses handed to companies for retaining furloughed staff and for offering apprenticeships amid fears of mass youth unemployment resulting from COVID-19 fallout.

‘People need to know that although hardship lies ahead, no-one will be left without hope,’ Sunak told parliament on Wednesday on delivering a mini-budget aimed at kickstarting the UK economy devastated by the country’s lockdown.

Noting that ‘people are anxious about losing their jobs, about unemployment rising’, Sunak said: ‘We’re not just going to accept this.’

But he insisted that the furlough scheme ‘cannot and should not go on forever’, with the taxpayer continuing to spend billions of pounds on paying the wages of millions of workers.

Prime minister Boris Johnson’s spokesman said on Thursday that while news of the retail job losses was ‘very worrying’ for staff, the government had ‘put in place a very substantial package which allows businesses to draw upon a range of financial support during this challenging time’.

Boots and John Lewis on Thursday both said that online trading was becoming more central to their businesses.

John Lewis, whose physical stores were already struggling before the coronavirus outbreak as shoppers switched to online purchases, said that it expected to sell the majority of its goods through the internet this year and in 2021.

‘Before the virus struck, 40 per cent of John Lewis sales were online,’ the company said in a statement on Thursday.

‘This could now be closer to 60 to 70 per cent of total sales this year and next.’

Among the eight shops shutting permanently is a department store in England’s second biggest city Birmingham and a much smaller outlet at London’s Heathrow airport.

John Lewis forms part of the John Lewis Partnership comprising also the upmarket Waitrose supermarkets.

‘Closing a shop is always incredibly difficult,’ John Lewis Partnership chair Sharon White said in a statement.

‘However, we believe closures are necessary to help us secure the sustainability of the Partnership and continue to meet the needs of our customers however and wherever they want to shop.’

Boots meanwhile said that COVID-19 had ‘accelerated the shift by consumers towards digital channels and online shopping’.

Owned by Walgreens Boots Alliance, Boots UK said that it planned ‘significant restructuring across its head office, store teams and opticians... resulting in a reduction of its headcount of more than 4,000 and the closure of 48 Boots Opticians stores’.

Britain is in the final stages of rolling back nationwide coronavirus restrictions imposed on March 23, starting with the hospitality and tourism industries.

The country has suffered Europe’s deadliest virus outbreak, with nearly 45,000 deaths, and the worst economic downturn among the G7 leading industrialised states.

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