The UK government introduced various measures to financially support companies that are struggling due to COVID-19. One of the measures is the three-month moratorium (ban) on tenant eviction for non-payment of rent. The government has also provided £330bn worth of loans to support businesses and encourage borrowing during this difficult time. However, we’ve seen several retailers, such as Primark, refusing to pay their quarterly rent.
Some retailers have expressed that refusal to pay rent was motivated by the need to conserve cash to pay staff and maintain short term liquidity, at a time when most shops are forced to shut and revenue streams are steeply diminishing. As such, the government’s furlough scheme seemed welcome by retailers, as we’ve seen Primark place around 68,000 employees on furlough.
It is however doubtful to what extent the government’s loan scheme has been of help to the retail sector because retailers seem to have difficulty in accessing these emergency loans. This is emphasised by the British Retail Consortium (‘BRC’), the go to trade association for UK retailers, which highlighted how most retailers do not satisfy the requirements set out to access the loans.
By Alice Muasher