In “normal times,” the days leading to Christmas and New Year are hectic for business sectors that have significantly suffered from COVID containment measures. Lockdown has sent most consumers to the internet to do their shopping, and footfall has generally crashed since March 2020. Office Christmas parties and pre-Christmas drinks or meals, both social and professional, made December a very busy time for the hospitality sector. People stocking up for Christmas dinners could have provided a lot of needed revenue to the food and drink sector.
Things were already challenging even before the Omicron variant made its way north from the Southern Africa regions. Problems with global logistics meant that consumers would not necessarily find what they wanted locally. Even the mighty Amazon resorted to chartering ships to ensure that items would be available for Christmas. Others followed Amazon’s lead; Asda chartered a cargo ship to “navigate supply chain issues in the run-up to Christmas and ensure that its stores stocked enough festive items.” John Lewis teamed up with other retailers and chartered cargo ships as well. Items usually shipped in containers on board of ship were flown to be available in time. According to an article published in The Times, inflation had put up the cost of a Christmas dinner by 3.5% on average, with higher price increases for some items.
It all sounded like an uphill struggle. Christmas 2020 was a relatively gloomy affair with the second wave (or was it the third?), causing another lockdown. People had started going back to the office; theatres were open, everybody was determined to have a good time in 2021 and do their bits to ensure economic growth in the UK.
Then Omicron appeared. The media were full of articles about Corporate Christmas parties being cancelled, masks and social distancing was back, people attending small or large gatherings were instructed to take a rapid lateral flow Covid Test. Then the UK Government triggered Plan B. Face masks became mandatory in more places, vaccine passports to enter nightclubs and work from home unless it is strictly necessary to go to the office. The work from home mandate is meant to curb socialising, but the hospitality industry warned of job losses and bankruptcy over the new rules, with an overall cost of £4 billion a month. The Institute of Economic Affairs said that the new rules could “easily” knock 2% off the country’s GDP. The mandatory test before flying back to the UK dampened the enthusiasm for winter sun holidays. TUI Group cut its winter capacity to around 60% of pre-Covid from a planned 80%. However, the Fraser Group – which includes Sports Direct, House of Fraser, and Flannels – reported a three-quarter profit jump.
As things look at the beginning of December, Christmas 2021 may have saved the recovery for some business sectors but not for others. The overall country GDP may just manage zero growth in December.