London (CNN Business)The UK government's decision to lift almost all remaining coronavirus restrictions in England on Monday was expected to deliver a windfall for businesses that have been hampered by social distancing rules.
But a growing number of companies, including supermarkets and pubs, are now facing worker shortages that threaten their operations, as coronavirus infections surge and keep scores of people away from their jobs.
One of Britain's leading pub chains Greene King said it had to temporarily close 33 pubs in the last week because of the number of employees required to go into quarantine after coming into contact with someone who has tested positive for Covid-19.
It's currently a legal requirement in the United Kingdom to isolate at home for 10 days if you test positive for the virus or if told to do so by the national test and trace service, which alerts people via an app if they've had close contact with someone who has tested positive. Fines are payable for breaking the rules, which are expected to be relaxed on August 16.
With new coronavirus cases approaching 50,000 a day — the highest rate of infection since January — and hundreds of thousands more people told to isolate by the app, businesses are urging the government to ease the rules for people who are fully vaccinated much sooner than next month.
"We are already seeing a serious impact on retail operations as a result of staff having to self-isolate and this will only get worse right across the economy, as cases are already rising fast and the final restrictions are eased," said Helen Dickinson, the CEO of the British Retail Consortium, in a statement.
"Given the effectiveness of the current vaccine roll-out programme, the government should pull forward the August 16th date so that people who are fully vaccinated or have a negative test are not forced to needlessly quarantine when they are contacted by track and trace," she added.
Britain's largest grocer Tesco (TSCDF) was forced to abandon some online deliveries on Sunday due to a shortage of truck drivers, despite telling shareholders last month that it had plans in place to address the shortfall. The company told CNN Business on Monday that it has no plans to reduce store hours or close any supermarkets.
Rival chain Iceland Foods has not been as fortunate. It's already had to close some stores for the first time since the pandemic began because it does not have enough people to staff them, managing director Richard Walker wrote in the Daily Mail last week.
Walker told BBC Radio 4 on Monday that more than 1,000 employees, or 4% of its workforce, are isolating due to Covid — a 50% increase over the past week and a 400% increase compared to a month ago. As infections rise, "it could get a lot worse, a lot quicker," he added.
Meanwhile, Marks & Spencer (MAKSY) CEO Steve Rowe said that the retailer could also be forced to change or reduce store hours due to worker shortages. "Our Covid cases are roughly doubling every week and the pinging level [via the app] is about three to one of Covid cases," he told The Times newspaper on Friday.
Pedestrians on Bow Street on so-called 'Freedom Day' in the City of London on Monday, July 19, 2021.
While retail and hospitality businesses appear to be hardest hit, the problem is creeping into other areas of the economy too.
Car manufacturer Vauxhall Motors, which is owned by Stellantis, said Monday that its plant in Luton will move from three shifts to two for the duration of this week because increasing numbers of employees have been contacted by the test and trace app.
Nissan (NSANF) is grappling with similar challenges. It too has had to adjust production "in certain areas" at Britain's biggest car plant because of staff shortages linked to the test and trace rules.
"It is not an exaggeration to say factories are on the verge of shutting and that at some sites hundreds of staff are off work," Steve Turner, assistant general secretary at manufacturing union Unite said in a statement on Sunday.
"One major engine supplier has said that so many people are absent and orders so far behind that work may to be permanently relocated to China," Turner added.
The British Chambers of Commerce, a business lobby group, said last week that companies need to know if the government has any plans to allow people to return to work more swiftly. "Instances of self-isolation will almost certainly continue to rise between now and the change set for August 16," co-executive director Hannah Essex said in a statement.
