Bricks & mortar retailers likely to benefit from the Job Retention Scheme the UK Government announced on Friday. Wage costs are the largest P&L costs. Non-food retailers started to shutter stores from last week. Online businesses are unlikely to benefit to the same extent as they continue to trade, though some may benefit if distribution/head office workers are furloughed. A grant will be given to employers who put employees on furlough rather than lay them off, which will be paid back via PAYE. The payment will be backdated to 1 March and last 3 months initially. The Government will repay the employer 80% of an employee’s salary, up to £2,500 per month. The exact benefit at an individual company level is unclear as companies work through the detail. Many questions are left unanswered at this time. It is likely to apply to store staff and potentially some in distribution, though not all retailers run their own distribution centres. There are likely to be fewer head office and support opportunities. Those with international operations may also benefit from similar schemes, particularly in Europe, where such schemes are in operation although the subsidised amount varies by country. The position in the US is currently unknown. We have attempted to simplistically quantify what the benefit of UK action may be by company (Figure 1). Using the last Annual Reports, we have taken total wage costs (minus director salaries) and average number of employees from the last published Annual Report for each company. We have calculated average monthly earnings per employee and estimated what proportion are UK based to give a monthly benefit. For some retailers, store staff have a high proportion of commission (e.g. Watches of Switzerland, ScS) which would disappear anyway in a closure situation. HMRC has also suspended quarterly VAT payments until the end of June and firms will have until the end of the year to pay them. This is in addition to the deferral of all HMRC payments (e.g. PAYE, National Insurance, tax) and 12-month business rate holiday. These should all help short-term cashflow and ensure most retailers can deal with a 3-month closure. All forecasts, except for WH Smith, are pre-COVID-19 impact. WH Smith gave guidance on the potential COVID-19 impact, though events have moved on since then. With the situation changing by the day, we await better visibility before changing numbers. We would expect very few dividends, if any, to be paid out by retailers over the next 6 months. Events like this tend to result in the strong getting stronger while recovery plays tend to get set back a year or so, as they emerge with more debt and less ability to invest. We would favour the more consistent proven growth stories like B&M, JD Sports, Greggs, Watches of Switzerland and WH Smith.