UK retail enjoys best quarter on record as sales surge 13.1 per cent

Posted on 14th July 2021 by Sam Giltrow

Retail sales have seen a record increase over the past three months, amounting to the ‘best quarter on record’ with shoppers returning to stores in force since the easing of lockdown restrictions back in April.

According to the latest BRC-KPMG retail sales monitor, total sales in June increased 13.1 per cent against a decline of 1.3 per cent in June 2019, fuelled by stores re-opening and the continued allure of online shopping.

On a like for like basis, UK retail sales increased 17 per cent from June 2019, when they had decreased 1.6 per cent from the preceding year.

Helen Dickinson, chief executive of the British Retail Consortium, said: “The second quarter of 2021 saw exceptional growth as the gradual unlocking of the UK economy encouraged a release of pent-up demand built up over previous lockdowns.

“In June, while growth in food sales begun to slow, non food sales were bolstered by growing consumer confidence and the continued unleashing of consumer demand. With many people taking staycations, or cheaper UK-based holidays, many have found they have a little extra to spend at the shops, with strong growth in-store in June.”

The good news for retail hasn’t, however, come without its warning, and Dickinson has suggested that UK retail is still ‘facing strong headwinds’ with many retailers ‘still making up for ground lost during the previous lockdowns.’

Footfall in city centres remains low, while international tourism is still well below pre-pandemic levels.

“Consumer comfort with the next stage of the roadmap will be key to the ongoing success of retail. Many customers are looking forward to a return to a more normal shopping experience, while others may be discouraged by the change in face covering rules.

“The government will need to reassure the public on safety, while pushing forward with its hugely successful vaccination programme.

“The public will also need to be understanding of one another during the easing of restrictions; there has been a big rise in violence and abuse against retail workers during the pandemic and colleagues cannot be put in the firing line because of this change in policy.”

Paul Martin, UK head of retail at KPMG, added: “Retail sales growth continued in June, albeit at a slower rate as the re-opening of hospitality and leisure sectors led to a dilution in consumer spending. The fight for share of wallet is underway, as consumers unleash pent up demand for social activities as restrictions in the UK continue to unwind.

“While the high street saw continued growth in June, with sales up 10 per cent, online sales fell back by seven per cent compared to June 2020. However, penetration rates for online sales remain much higher than their pre-pandemic levels, suggesting the shift to online is here to stay.

“Retailers are facing challenges on a number of fronts, particularly convincing consumers that it’s safe to shop in store as restrictions around mask wearing and social distancing come to an end. With travel now looking to be back on the agenda for summer and Government COVID-19 support packages slowly coming to an end, retailers will be hoping that the feel good factor from Euro 2020 and lifting of COVID-19 restrictions will give the high street the summer boost it needs.”

Up to 70 of the UK’s shopping centres face closure and redevelopment due to shifting consumer habits

Posted on 7th June 2021 by Sam Giltrow

Around 70 shopping centres across the UK are facing the threat of closure owing to the longer lasting impact of the coronavirus pandemic and the lean into online shopping over the past year.

Reports suggest that over-expansion of retail space must also be factored in when assessing the current health of the UK’s shopping centre sector, with the future of some ten per cent of the UK’s 700 shopping centres now in the balance. It is believed that a number of the centre built in the 1970s and ’80s will be at least partly redeveloped into homes, offices, or for other uses.

According to a Local Data Company (LDC) analysis of centres in England, Scotland, and Wales, at least 30 shopping centres in the UK are now at a minimum half empty, including five that are now more than 80 per cent vacant. A further 34 have between 40 per cent and 50 per cent of their shops vacant, with at least 10 shops in them.

Shopping centres across the UK have been dealt a blow by the coronavirus pandemic that has not only seen forced lockdowns shut major retail destinations like themselves, but has also driven consumers to online shopping, as well as a new preference for staying local in the midst of social restrictions.

“There’s no doubt that the Covid-19 pandemic has exacerbated many of the challenges we were seeing across the physical retail environment, with shopping centres having been particularly exposed to categories in decline, such as fashion and casual dining,” LDC commercial director Lucy Stainton said.

It’s according to the head of retail research at Knight Frank, Stephen Springham, that 10 per cent of the UK’s shopping centres are no longer viable. Springham also believes that a further 20 to 30 per cent will need a ‘significant overhaul’, with shops retained, but large portions of each given up for homes, offices, and other uses.

A number of the UK’s shopping centres already set for development include the likes of Nottingham’s Broadmarsh, where demolition starts this month, Stockton’s Castlegate, the Riverside Centre in Shrewsbury, the Chilterns Centre in High Wycombe, and Nicholsons in Maidenhead.

John Lewis confirms eight stores will not reopen after lockdown lifts in April

Posted on 24th March 2021 by Sam Giltrow

The department store chain, John Lewis has confirmed plans to not reopen eight of its 42 UK stores when the current lockdown lifts on April 12th this year. The move will put more than 1,400 jobs at risk.

The retailer’s stores in Aberdeen, Sheffield, Peterborough, and York will remain closed, as well as four of its smaller ‘At Home’ stores in Tunbridge Wells, Ashford, Basingstoke, and Chester. The planned closures will threaten the future of a total of 1,465 roles with the firm.

The latest development echoes of similar actions taken by the department store chain when its kept eight other stores permanently closed after the first lockdown last year. As of April 12th this year, John Lewis’ estate of department stores will stand at 34.

John Lewis has pointed towards the ‘significant shift towards online shopping in recent years’ as the reasoning behind the latest closures, adding that the decision followed “substantial research to identify and cater for new customer shopping habits in different parts of the country.” According to the team, the eight stores were already “financially challenged prior to the pandemic.”

In a statement, the company said that it believes the online shopping trend “will not materially reverse” and that the performance of these eight stores “can be substantially improved.”

Previously, the group has voiced its expectations that at least three fifths of revenues will be generated online, even when shops are trading normally again.

“Having fewer bigger stores allows us to invest significantly to improve our remaining ones,” said the company. It will also test new, smaller, local shops along with stores within its Waitrose supermarkets.

Moonpig grows its kids’ gifting portfolio with LEGO partnership and ‘ambitious plans for more to come’

Posted on 18th March 2021 by Sam Giltrow

The online gifting specialist, Moonpig has detailed its huge ambitions’ for its giftable kids range, growing its portfolio of toy partners and most recently welcoming LEGO into the fold.

The firm’s partnership with the LEGO Group marks a significant step forward for the company as well as ‘its biggest brand launch on its site to date.’ Until now, Moonpig has partnered with the likes of Playmobil, Hasbro, and Pokemon, but not launched a portfolio as large as its LEGO deal.

The partnership has been billed as ‘the first of more to come,’ as Moonpig outlines its vision to “become the ultimate gifting companion for customers.”

David Rimmer, commercial director of Moonpig, told Licensing.biz: “We have been a huge emphasis on bolstering our gifting offer. As part of this, we have brought on board a number of new toy brands recently, including Playmobil, Hasbro, and Pokemon and will continue to add beloved brands as we build our kids’ gifting and birthday ranges.”

The new LEGO range features 13 different themes with more than 50 products, spanning Duplo LEGO, LEGO Marvel, and LEGO Architecture.

Its licensed line up features the popular LEGO Harry Potter and LEGO Star Wars, while the top selling LEGO City and LEGO Friends also feature.

Moonpig launched the new brand with bespoke site looks – a dedicated landing page as well as content all around the site to showcase the extensive range, and has the ambition to grow the offer even further throughout the year.

Rimmer added: “We are very excited for Lego to join our offer as the latest addition. Our ambitions are huge for our kids range, so make sure to watch this space.”

The Moonpig business has been bolstering its expanding gifting offer with a long list of brands. In the past three months, Moonpig has introduced over 50 new brands across food, alcohol, beauty, home and toys, including Playmobil, Hasbro, and Pokemon.

Chancellor ‘considering tax on online giants’ to help payback Government’s Covid spending

Posted on 8th February 2021 by Sam Giltrow

Amazon and other major online retailers could be facing a new online sales tax to help the UK pay its debts following extensive borrowing during the pandemic.

Treasury sources have confirmed that Chancellor Rishi Sunak is considering initiating a tax that will target companies who have done well out of the coronavirus crisis in order to help pay back UK government debts.

The new tax is being considered as part of a business rates review after a consultation was held last year. It also emerges following calls from business leaders of 18 companies, including Tesco, Morrisons, Asda, Waterstones, and more, for a fundamental overhaul of how retailers are taxed in the UK.

Amazon saw sales in the UK increase by 51 per cent to nearly £20bn in 2020 as lockdown restrictions forced people to shop online. A report last week however, has suggested that the online behemoth paid just £71 million in business rates on its entire UK estate, including fulfilment centres, research and development centres, corporate offices in London, Amazon Lockers, Whole Foods Market stores, and delivery stations.

Furthermore, and according to real estate advisor Altus Group, who conducted the research, this represented a tax to turnover ratio of just 0.37 per cent.

Tesco’s chief executive Ken Murphy has now pushed for a one per cent levy on online sales, a move which could drastically alter the UK’s retail landscape, and a move that is now being considered by the Chancellor as attention turns to plans to help the UK’s high streets survive the pandemic.

Leaked emails showed Treasury officials had summoned tech firms and retailers to a meeting this month to discuss the online sales tax. The Sunday Times reported that Downing Street is also looking at introducing an ‘excessive profits tax’ on companies that have seen profits surge due to Covid-19.

“We want to see thriving high streets, which is why we’ve spent tens of billions of pounds supporting shops throughout the pandemic and are supporting town centres through the changes online shopping brings,” said a Treasury spokesman.

“Our business rates review call for evidence included questions on whether we should shift the balance between online and physical shops by introducing an online sales tax. We’re considering responses now.”

The Centre for Retail Research said that high street retailers paid around 2.3 per cent of annual retail sales in business rates before the pandemic.

Helen Dickinson, chief executive of the British Retail Consortium, said that ministers should not prevent businesses’ ability to recover from the pandemic.

“The key to reviving our high streets is fundamental reform of the business rates system and we oppose any new taxes that increase the cost burden on the industry which is already too high,” she said. “Economic recovery after Covid will be powered by consumer demand – the Chancellor should ensure he doesn’t introduce any new taxes that stifle this.”

Amazon has said that it will not comment on the online sales tax reports.

Sainsbury’s to close 420 Argos stores amid plans to save £600 million by 2024 and meet changing consumer habits

Posted on 6th November 2020 by Sam Giltrow

A total of 420 standalone Argos stores are to be closed by March 2024, the super market giant and owner of the Argos store brand, Sainsbury’s has confirmed, amid news that it is to cut 3,500 jobs across its portfolio.

The retail giant’s boss Simon Roberts said that the move was Sainsbury’s response to changing consumer habits and the growth of online shopping. Amid the closures will be all of Sainsbury’s meat, fish and deli counters owing to lower customer demand and a desire to cut food waste.

Of its Argos portfolio, the grocer has stated that 150 outlets will be opened within its supermarkets, but that by the end of its restructuring, which will see the permanent closure of 420 standalone outlets, its total number of Argos stores will be around 100. The restructuring will save about £600 million by 2024, the firm said.

Sainsbury’s suffered a £137 million loss in its half-year results, a dive it has blamed on closures and market changes.

The company, which bough Argos in 2016, said in its statement that the 120 standalone Argos stores that had not reopened since they were closed in March would now be shut permanently.

In addition to the 150 Argos stores it plans to open in its supermarkets by 2024, it also plans a further 150-200 collection points.

“We are talking to colleagues today about where the changes we are announcing in Argos standalone stores and food counters impact their roles,” said Simon Roberts, Sainsbury’s chief executive.

“We will work really hard to find alternative roles for as many of these colleagues as possible and expect to be able to offer alternative roles for the majority of impacted colleagues.”

He said the aim was to make Argos “a simpler, more efficient and more profitable business”. Products from the Habitat brand will also be more widely available in the stores and via Argos.

“Our other brands – Argos, Habitat, Tu, Nectar and Sainsbury’s Bank – must deliver for their customers and for our shareholders in their own right,” he said.

Despite the cutting of the 3,500 roles, the supermarket expects that it will have created about 6,000 net new jobs by the end of the year.

Online shopping habits could be here to stay, says new research from DS Smith

Posted on 21st July 2020 by Sam Giltrow

The pandemic has accelerated consumers’ move to online shopping, with new research into consumer behaviour indicating that the majority of Brits now plan to stick to their lockdown online buying habits from here on out.

According to a survey commissioned by DS Smith, the London-based packaging specialist, retailers have seen online sales increase dramatically, with 61 per cent of Brits admitting to shopping more online during Covid19. The unsurprising increase in ecommerce is expected to add £5.3bn to UK ecommerce sales in 2020, bringing the total to £78.9bn.

The same survey goes on to reveal that 89 per cent of British shoppers say they will continue to shop online at the same level, or even more, post lockdown. 93 per cent of Brits now feel confident about buying items online.

Groceries has seen the biggest increase, with 39 per cent of British shoppers reporting an increase in online shopping. Lockdown also saw 29 per cent of Brits increase their online shopping for home and garden products – contributing to the 41 per cent of Brits who received a home, garden, or DIY related product since the Covid-19 crisis.

With lockdown easing, DS Smith’s research indicates that many of these new shopping trends will now be here to stay. More than half of Brits are planning to buy groceries (60 per cent), hygiene products (51 per cent), and home and garden products (54 per cent) online at the same rate or higher in the coming six months.

On top of this, almost one third of Brits said they have signed up to a new shopping website that they hadn’t used before lockdown, while spending on meal kits and grocery delivery boxes soared by 114 per cent after people were told to stay home.

Stefano Rossi, packaging CEO at DS Smith, said: “There has been a seismic shift in the way consumers are shopping and we’ve been using our expertise to support businesses of all sizes with the rapid growth of ecommerce so they can survive and thrive through this uncertain time.

“What’s clear is that as lockdown eases further, these trends aren’t likely to fall away. Consumers have found new confidence and convenience in the way they shop, buying a whole range of items online – everything from the family food shop, to toiletries and home and garden products.

“If companies are not already transforming their business to meet this new age of ecommerce, they risk being left behind.”

The survey has gone on to detail the latest statistics around greener packaging, suggesting that green recovery and building back better is becoming a global priority, while sustainability is an increasing concern for Brits post-lockdown. It indicates that 24 per cent of shoppers are more likely to buy online if items are delivered with less packaging or more sustainable packaging, while 21 per cent are more likely to buy online if their products arrive in more recyclable packaging.

Rossi added: “The research shows that greener packaging is a real concern for shoppers and as we help our customers make a green recovery a practical reality and priority through simple measures like adopting sustainable packaging. We’re keen to help brands and businesses navigate this path and work with them so they can benefit from sustainable packaging solutions.”

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