In Britain, the Economic Comeback Is in the Suburbs
In Britain, the Economic Comeback Is in the Suburbs
READING, England — The British economy is facing its worst recession since “The Great Frost” of 1709, a horrifically cold winter. Large retailers are shutting stores, and inconsistent quarantine rules are raising anxiety about a second pandemic wave. And yet Summertown, a suburb north of Oxford, has something to look forward to: Its main shopping street is about to get a new bookstore.
Daunt Books, a prominent chain, is opening its ninth store this weekend in Summertown. The suburb’s last bookstore closed in 2018 after nearly four decades. “People are so delighted a shop is opening and not closing,” said Brett Wolstencroft, the manager of the bookseller.
About 60 miles away, in central London, the scene turns bleak.
Daunt’s flagship store on Marylebone High Street, in an Edwardian building with stained glass and parquet floors, is normally a popular destination, drawing in travelers and locals alike. These days, it’s “very, very quiet” for long stretches of the week, Mr. Wolstencroft said.
Go further into central London, and the Daunt store on Cheapside, not far from St. Paul’s Cathedral, is doing even worse. “There is nobody there at the moment,” Mr. Wolstencroft said. “It’s down to a trickle of people.”
Without tourists and office workers, city centers in Britain are suffering steep economic losses from the measures put in place to contain the spread of the coronavirus. Even though shops and restaurants have been allowed to reopen since being ordered shut in March, foot traffic in central London was down 72 percent in mid-July compared with last year, according to Springboard data on retail activity. If the pandemic permanently alters the way many people work, shop and travel, this slump will become entrenched and cities will no longer be the essential engines of growth that they once were to national economies.
It is a serious problem for Robin Baxter, the 27-year-old co-owner of Hideaway Coffee in central London. The small coffee shop, situated in a Soho courtyard, was dependent on nearby office workers before the pandemic.
“We used to go through 30 kilos of coffee a week, and now we’re going through just under a kilo a day,” Mr. Baxter said. The shop used to be open from 8 a.m. to 5.30 p.m. Now it opens at 9 a.m. and closes once they it does not have a customer come in for an hour — usually around three or four in the afternoon, he said.
Areas out of town, however, appear to be benefiting from people’s desire to meet and shop in less densely populated places closer to home. Mr. Wolstencroft said the new store’s suburban location in Summertown was an advantage. The foot traffic at other Daunt stores in more residential areas in North London have given him a reason for optimism. “These feel quite normal,” he said.
London’s recovery is lagging behind the rest of the country, according to analysis from Fable Data, which uses transactions records from credit card companies and banks to track spending patterns. In the past month or so, spending in “majority urban” areas, particularly in central London, has been weaker than spending in less densely populated urban areas, such as suburbs and other towns away from the capital city (“mixed urban”).
This shaky upturn can be seen in Westbury-on-Trym, a suburb of Bristol in southwest England, where Tiriel Lovejoy has just expanded his small chain of specialty retail markets called Preserve Foods.
“The lease was ready to be signed pretty much the day the country went into lockdown,” Mr. Lovejoy said. Other retailers he knew thought about delaying expansion plans, but he took a gamble. “I thought, ‘Well, this Covid is temporary, and what we do is hopefully permanent.’”
Part of a budding group of zero-waste grocery stores, Preserve Foods sells food by weight, encourages customers to buy only the minimum they need, and avoids packaging. The two other stores are also on the outskirts of Bristol’s city center, and like other grocers and supermarkets, they were insulated from the worst of the pandemic’s economic shock.
In fact, in the weeks before the government enforced a lockdown in March, the original shops did two and a half times the sales as usual Mr. Lovejoy said. And during the months when people were told not to go outside except for essentials, sales were similar to a normal week, he added. The biggest change was in the mix of what was sold: lots of flour, few toiletries.
But it is unclear if that hum of activity will continue. The surprisingly strong sales during the lockdown have started to dissipate, and opening weekend in Westbury-on-Trym was quieter than Mr. Lovejoy had hoped. And there are the small additional costs that add up; more credit card transaction fees and disposable shopping bags. “It’s been hard,” he said.
While Britain’s city centers are comparatively empty, the suburbs are not exactly booming. Even Mr. Wolstencroft of Daunt Books is not certain how the Summertown store will do. “It’s probably a question of whether people stay and browse,” he said. “There’s an experiment about to happen.”
Expensive government-funded wage protection programs, praised for keeping households afloat, are being phased out in favor of incentives to get people spending in the hospitality industry. There are hopes that by reopening the economy, much of the recovery will take care of itself. But that is putting many businesses to the test.
Research suggests people and businesses have taken a more cautious approach to the pandemic than Britain’s policymakers.
Outside of London, even businesses fortunate enough to see a steady return of customers are scaling down their ambitions. About 40 miles west of the capital, everyone at Tutu’s Ethiopian Table on a recent Friday was sitting at tables outside. Although indoor dining in restaurants has been allowed for weeks, Tutu Melaku does not want to take any risks, regardless of government guidelines. She said she would not allow customers to sit inside her cafe until October, at the earliest.
Ms. Melaku, who was born in Ethiopia but has worked in Britain for the past three decades, opened her cafe and restaurant last year in Palmer Park, a public park in a largely residential neighborhood outside the center of Reading, a large town of about 230,000. Over the course of a year, she built up the business with music and quiz nights and other events in addition to the traditional Ethiopian stews on her menu, such as keye sega wot, served with injera bread. “When that was all settled, when I said, ‘That’s it, I’ve done everything,’ Covid arrived,” Ms. Melaku said. She shut the doors, and furloughed her staff members.
Two months later, she reopened the cafe alone, offering a takeout service that proved to be a success. And so on July 4, the first day restaurants were allowed to serve diners on the premises, the cafe opened for outdoor dining only, with a shorter five-hour day and a smaller menu. “We were busy all week,” she said. “We had more people than before Covid.”
But despite the successful reopening of Tutu’s Ethiopian Table, Ms. Melaku is cautious about the future. The government’s furlough program, which has supported a third of Britain’s labor force, now requires employers to pay a portion of their workers’ wages to keep them on the program. The stricter terms of the program, which will end completely in October, led Ms. Melaku to lay off her one full-time staff member in July.
Even next year, she does not plan on opening the cafe in the evenings again on a regular basis because she is concerned about the continuing spread of the coronavirus and expects to have fewer customers. But Ms. Melaku said this will allow her to save on essential costs, including electricity. “There is no need for me to open,” she said.
On the edge of Reading, Woodley, a suburb of about 34,000, is experiencing a burst of activity. It has its own town center, made up of an eclectic mix of shops and cafes around a tree garden that is still waiting to be planted. It has come to life as people stick closer to home.
The Saturday market is back to normal, according to Brian Fennelly, the manager of the town center. “Last Saturday’s one was the busiest we’ve had this year, even pre-the Covid lockdown,” he said last week. A new vegan market on July 19 was three times the size of the one in June, he added.
But again, long-term success is not assured. Already Mr. Fennelly is concerned about Christmas. Normally planning would be well underway by now, but he is trying to delay any major decisions until October. This year, the Christmas lights will still be turned on, he has ordered a tree, but he expects most of the town’s residents will be watching the ceremony via a livestream.
Iliana Magra contributed reporting from London.