London 2012 - Open all hours

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Introduction

From next Sunday, 22 July, large stores can remain open for longer on the eight Sundays that fall during the London 2012 Olympic Games and Paralympic Games.  Under current Sunday trading laws, large shops are limited to opening times of six hours between 10am and 6pm on Sundays.  Without this relaxation in the Sunday trading laws, official merchandise stores on the Olympic sites could not open for more than six hours on Sundays.  Retail workers’ rights are not affected.  They are still able to opt out of Sunday working.

If judged a success, this temporary change could be the first step towards a permanent change in the law.  Opinions are mixed over whether this would stimulate growth and create jobs or harm smaller stores.

What are the key points?

Sunday trading was prohibited from the 1950s.  This changed in 1994 with the introduction of new rules permitting limited trading:

  • All shops with a floor space of less than 280m² are free to open on Sundays without restriction.
  • Shops with a floor space greater than 280m² are restricted to opening for a maximum of six hours between the hours of 10:00 am and 6:00 pm.

The relaxation of Sunday trading rules for London 2012 is designed to show that Britain is open for business.

The change is not limited geographically; it applies to all shops equally across the country.  While it seems likely that official merchandise stores and London stores will benefit from the change, this may not be the case for stores outside London and away from Olympic venues.  Retailers will need to weigh up the additional costs involved in opening and the potential for increased sales.

Commentators have queried the need for the relaxation and whether this could be a first step towards a permanent change in the law.  The Keep Sunday Special campaign group called the plan “profoundly worrying” while trade union Usdaw (which represents retail, distribution and service workers) raised fears that suspending the Sunday trading rules could be “a test case for a permanent relaxation of the rules in the future”.

How does this affect your business?

Shopping centre owners and retailers with stores affected by the change need to consider carefully the extra costs involved in opening for longer.  Staff costs, energy use and distribution costs for the extra hours may exceed any profit made.  While stores in London and near the Olympic sites are likely to benefit from increased profits, elsewhere the shopping day may simply be extended without any additional sales or footfall.

Additionally, shopping centre owners and retailers need to consider:

  • Employment contracts.  Staff may only be contracted to work set hours.  Employees are still able to opt out of Sunday working, but are required to give two months’ notice (instead of the usual three months’ notice).
  • Lease restrictions.  Opening hours in shopping centres are often decided by centre management and included within lease documentation.  A number of shopping centre owners include an express provision permitting these hours to be altered by centre management. Prior to altering, owners must consider whether revised hours conflict with servicing contracts such as cleaning or deliveries.

What are the next steps?

By now retailers will have decided whether they wish to extend their opening hours during London 2012.  Any extension will have required consultation with their employees.  This will assist in gauging the impact of a permanent change in the law on employees.

Research into Sunday shopping habits in differing catchment areas should also reveal whether there is public enthusiasm for extended Sunday trading and will help in assessing the likelihood of increased sales against the cost.  Looking ahead, while the Business Minister, Mark Prisk, has mollified objectors by stating that this change “is a temporary measure and not a test case for a more permanent relaxation of rules in the future”,  there is no guarantee that there will not be a permanent change in the future.

BLP perspective

Deregulation may be welcome in some areas but in others the likely profits may not exceed the increased costs.  Retailers will need to balance these carefully.  While a permanent change in the law is unlikely in the near future, it cannot be ruled out in the long term and the eight week period will provide some useful statistics.

BLP’s Olympic Heptathlon

This article is the fourth in a 7-part “heptathlon” series, in which our lawyers are sharing their views on the commercial and legal impact of the London 2012 Olympic Games and Paralympic Games.  The previous article in this series came from our Commercial Disputes team; on the potential for recovery of exceptional losses arising in the context of the Games.

In the next article, the Litigation and Dispute Resolution team will look at how to manage the risk of high profile disruption to your business during London 2012

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