Written by Tom Gillingham, associate partner
Edited by Kevin Pringle, partner
The world has changed immeasurably in 2020. This vitiated reality is perhaps most jarringly apparent in recently reopened shops, now festooned with warning tape and lined with acres of plexiglass screens. It’s the same, but dissonant.
At first glance, today’s report on retail sales from the Office of National Statistics (ONS) suggests a degree of rebound. However, these stats also underline the deep-set problems in attracting people to physical retail spaces that virus prevention measures have not yet been able to fix.
Despite the pervading gloom, there are bright spots that cannot be discounted entirely. In-store purchases in household and hardware shops have held up best, augmented by soaring online sales.
Forget the blitz spirit, it would appear we’ve embraced B&M spirit to become a nation of tight-jawed DIY-ers, quietly - desperately - trying to paint our way out of this difficult economic corner.
Away from the queues and the edgy sidelong glances at those who still refuse to fully submit their noses to a face covering, today’s stats make it clear that online shopping has never had it so good. It’s surged from 20% of all sales in February to reach 31.8% in June.
There is an irony here.
It’s the justified fear of something in the air that’s accelerated this trend. But online shopping brings something into the air around our homes. Previously low-traffic neighbourhoods are increasingly visisted by chugging engines, firing out unwelcome particles from stop-start vans. Ninety-six per cent of vans are diesel powered, and as of 2018 ultra-low emissions light vehicles made up a tiny 0.3% of the market, so this reality isn’t going to change any time soon.
Whether or not these green shoots of retail recovery are sustainable remains to be seen, but the momentum towards online retail seems irreversible. Today’s figures show the cost of us not going to physical shops, but they don’t yet show the full cost of bringing the shops to us.
Tensions have risen as the Chinese government ordered the closure of a US consulate in the southwest of the country, in response to the US’s sudden closure of the Chinese consulate in Houston.
The US and UK have accused Russia of deploying an anti-satellite space weapon. There are concerns this could provoke a new ‘arms race’ at a time of already strained relationships.
Around 30 million people in England are to be offered the flu vaccine this year to help to prepare for a winter that could see the flu season coincide with a surge in coronavirus. This existing vaccination programme will include all over-50s for the first time. Plans for Scotland, Wales and Northern Ireland are yet to be announced.
Business and economy
UK chancellor Rishi Sunak is developing plans for a new infrastructure bank to deliver billions of pounds of new funding for capital projects across the country, which the government sees as a key route to recovery. This move is expected to support the £100bn infrastructure strategy document that will outline spending priorities in this area. (£)
Gold is trading at almost $1,900 an ounce, moving towards the previous record high set in 2011, as investors seek safe havens. Some analysts predict gold could hit $2,000 by September, while silver has also seen strong gains.
Dyson is cutting 600 of its 4,000 UK staff in response to Covid-19 challenges. Redundancies will be spread across the business but largely focused on retail roles. Following the rapid shift to online shopping, Dyson employees working at department store concessions are expected to be hardest hit.
Columns of note
Writing in the Guardian, Sonia Sodha suggests that vital lessons from the BSE outbreak in the 1990s may have not been learned, particularly on transparency. She suggests that there are not enough systems in place to protect scientific advice from bias and that, ultimately, the findings of any future enquiry into the response to Covid-19 might look very similar to those from the BSE report.
The Spectator’s ‘gossip columnist’, Steerpike, believes Boris Johnson’s team found the solution to him being heckled during yesterday’s trip to Scotland - deliver his press conference on the Union from a deserted field in Orkney.
Source: New Yorker
What happened yesterday?
London stocks finished up on Thursday, despite background concerns about the ongoing tensions between US and China. Following a busy day of corporate news, the FTSE 100 finished up 0.07% at 6,211.44, and the FTSE 250 was 0.14% up at 17,489.45.
Despite these gains, the latest survey of manufacturing firms from the Confederation of British Industry (CBI) saw total new orders fall at their fastest pace since October 1980, with domestic and export orders declining at record rates. However, for the first time since February, manufacturers said they now expect output in the next quarter to begin to recover.
In the US, the Dow Jones Industrial Average was down 1.31% at 26,652.33, while the S&P 500 was 1.23% lower at 3,235.66.
Sterling had a mixed day, rising 0.19% on the dollar to reach $1.28, but falling 0.18% against the euro to €1.10.
What's happening today?
TR Property Investment Trust
UK Economic Announcements
(07:00) Retail Sales
Int. Economic Announcements
(15:00) New Homes Sales (US)
Did you know?
In 2019, a survey found that one in six people in the UK who undertook a DIY project ended up injuring themselves, costing the NHS an estimated £222m in accident and emergency visits.
House of Commons
In recess until 1 September
House of Lords
Orders and regulations
Health Protection (Coronavirus, Restrictions) (No. 2) (England) Regulations 2020; Health Protection (Coronavirus, Restrictions) (No. 2) (England) (Amendment) Regulations 2020 - Lord Bethell
In recess until 10 August (with the exception of 30 July and 6 August 2020, on which dates business may be programmed by the bureau)