Page 34 - HW July 2020

global eyes
UK retail still struggling
the customer journey and retailers will need to pivot their business models to align with these new realities,” they say.
“As a result, they are taking a forensic look at their cost base which also includes lease renegotiations (68%), review of supply contracts (63%) and investing in online operations (42%).”
Retail Economics Chief Executive, Richard Lim, says: “ e survival of so many retailers will hinge on the success of reopening stores over the coming weeks and the pace at which consumers return.
“As the impact of Covid-19 re-wires the customer journey across some parts of the sector, retailers are assessing the implications and pre-empting a need to pivot business models quickly to align to these new realities.
“We’ve already witnessed a signi cant shift towards online necessitated by the closure of non-essential retail stores.
“Many of these consumers are shopping for goods online for the rst time, overcoming the barriers of setting up online accounts, entering payment details and gaining trust. It is inevitable that some of these behaviours will become sticky.
“ e new normal will involve a step- change in the proportion of online shopping and retailers are assessing what this means for the number of stores, where they should invest and the potential partnerships that could be formed.
“But cost-cutting will inevitably be high up the agenda of boardrooms across the UK.
“A hit to the sector will be inevitable and retailers are considering all the options they have at their disposal to cut costs quickly and preserve cash in the business.
“Cutting the number of stores and sta will be high up on the list. As we transition to a new normal, a more resilient sector will emerge.”
Meanwhile, as consumers consider coming back to shops, safety is being prioritised above price, quality, choice and the overall experience.
Indeed, says Retail Economics, almost half of all consumers surveyed said
that safety was the most important factor when deciding to purchase retail products in-store.
www.retaileconomics.co.uk
WHILE NEW ZEALAND and Australia appear to be seeing some light at the end of the Covid-19 tunnel, the UK particularly among the other European DIY markets, isn’t.
Take King sher: while growth at
trade outlet Screw x continues almost unabated, from a DIY perspective, sales at B&Q continue to be weak.
As a result of which, King sher is clearly pivoting even more strongly towards online.
Indeed, CEO, ierry Garnier, says in the Euro big-barn’s year-end report: “Our clear intent is to become a more digital and service orientated company, using our strong store assets as a platform.
“We will continue to develop our own exclusive brands as a di erentiator, cater for diverse local customer needs, and each retail banner will have its own positioning and plan. We will ‘power’ these banners as a Group.
“ is is our new strategic direction, ‘Powered by King sher’.”
UK online the only positive – By
way of further justi cation of this “new direction”, take the latest UK retail data from BDO, which reports back to back negative like for likes (LFLs) for the last ve months.
UK retail’s total June LFLs fell by
14.4% from a positive 3.5% base for the equivalent month last year. So June’s is actually the best result since February thanks to the lifting of restrictions on non-essential retail and the continuation of strong online sales.
Along with improving but still poor footfall in June, total in-store LFLs however dropped by almost 72% from a marginally negative base of 0.8% for June last year, while total non-store (i.e. online) LFLs however continued to perform strongly, increasing by almost 103% from a base of +16.5% last year.
e only other positive news from BDO’s June numbers was homeware retail, whose total LFLs improved by +25.5% in June from a robust base of +7.7% for the equivalent month last year.
is result is the second consecutive positive LFL for the category, in stark contrast to other segments.
www.bdo.co.uk/en-gb/ high-street-sales-tracker/home
Will the new normal stick? – According to a survey conducted by Retail Economics, and global law rm, Squire Patton Boggs, as many as 80% of UK retailers are considering redundancy measures as part of a range of cost-saving measures following the impact on sales of Covid-19.
“ e impact of Covid-19 will re-wire
32 NZHJ | JULY 2020
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