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Tuesday 23 June 2020

Corona Shock – June

We’re monitoring spending on the British high street. Our data reveals England and Wales are slowly recovering, but Scotland is stalling

By Chris Cook and Ella Hollowood

There are signs of good news from our corona shock tracker – Tortoise’s watchful monitoring of the British high street. There has been a continued general rise in household spending – from a very low level – across Great Britain. In the aftermath of lockdown, spending dropped by more than 40 per cent. In the last week for which we have data, we can see that spending in England and Wales is now just one fifth down on the same week of last year. The latest data, from late May, remains dire, but it shows the economy continuing a slow reawakening.

But there is a big difference between England and Wales, on one hand, and Scotland on the other – for which, for the first time, we have data. Our data, shared with Tortoise by SIB, the regeneration charity, shows how the nations of Great Britain have diverged.

These figures show how far down spending was in each country compared to the same weeks of last year. You can see the strange movements around Easter, as people stayed at home rather than going to visit anywhere.

The data, which reflects spending direct from bank accounts to named merchants, is a sample of high street bank customers. The sample contains between 12 and 27 per cent of bank customers in each part of the country. The scale of the shock matches other data sources, such as official retail spending data from the government.

Our fine-grain data shows that the three nations suffered the same initial thump, as lockdown knocked spending down by more than 40 per cent down on the same week as last year in late March. And, across the three nations, there has been a gentle rise since that low point. But whereas spending in Scotland levelled at around 33 per cent down, England and Wales are only 20 per cent down on last year.

This may reflect several things: notably the tougher tone from the Scottish government about lockdown. But also pre-existing factors: the Scottish economy is more dependent on tourism and travel than England or Wales: a constant factor in our analysis is that areas of lower population density which rely on heavy tourist traffic are the heaviest losers.

Within Scotland, the top five losses in the last week for which we have data, are all held by tourism hotspots.

Within England and Wales, for which our data is slightly older, the 10 areas with the greatest exposure to tourism have continued to suffer more than areas with particular densities in other industries. Again, their losses lead the pack.

The terrible losses they suffered compared to last year over the Easter break have been recovered a little – but more slowly than other places. By contrast, the ten towns or cities with the largest share of employment in retail have seen a continual rise in recent weeks as businesses open up.

Our data does not yet cover the period when the lockdown started to be eased in any part of the country, but it is clear that businesses in England and Wales were, in particular, finding new ways to serve customers even before that. By the time that the restrictions were being eased in England, businesses had already halved their losses compared to last year.

Our data only covers the very start of the period after the revelations about Dominic Cummings’ trip to Durham. We can, however, note that businesses in Barnard Castle, the town where he drove for 30 miles to “test his eyesight” did have the best week of the early lockdown in that week, suffering a mere 12 per cent loss. Perhaps there was an outbreak of myopia in the north east that week.

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