UK Retail Briefing: Inc Impact of COVID-19 - August 2020

ANALYST COMMENT – THE IMPACT OF COVID-19 ON SHOPPING BEHAVIOUR
Overview
Nearly half are still concerned about risk of infection
Figure 1: Those worried about the risk of being exposed to the coronavirus, April-August 2020
Figure 2: Those worried about the risk of being exposed to COVID-19, by age group, April – August 2020
Most remain uncomfortable to resume ‘normal’ activities
Figure 3: Those claiming to feel uncomfortable doing the following activities, 7-14 August 2020
Shift to online is a lasting change
Figure 4: Those claiming to Limiting the time spent in-store, April-August 2020
Figure 5: Those claiming to have increased the amount of shopping they do online, April-August 2020
Figure 6: Those claiming to have increased the amount of shopping they do online, by age, April-August 2020
The importance of non-cash payments
Figure 7: Those claiming to be trying to avoid using cash where possible, April-August 2020
Figure 8: Those claiming to be trying to avoid using cash where possible, by age group, April-August 2020
Figure 9: Those claiming to be using click & collect more, April-August 2020
Opportunities for retailers resulting from COVID-19
Broader use of technology
Figure 10: Virtual and augmented reality used in retail, 2020
Intensifying the use of robotics
Figure 11: Amazon’s use of robots for disinfection of warehouses and food stores, 2020
Figure 12: Zalando’s use of robots in warehouses, in Germany, 2020
Virtual reality platforms
Figure 13: Virtual reality training platform by 3F Lab in Italy, 2020
Consumers continue to cut down on discretionary spending
Figure 14: Those claiming to be cutting down on non-essential spending, April-August 2020
Figure 15: Those planning to spend more in the following sectors, May-August 2020
UK RETAIL SALES
Key points
Retail sales
Figure 16: Retail sales trends, January 2019 – July 2020
BRC vs ONS
Figure 17: UK retail sales y/y growth, BRC vs ONS, January 2018 – July 2020
Inflation
Figure 18: Annual % change in the consumer price index for selected product groups, May 2019 - July 2020
Real wages growth
Figure 19: Real wages growth: Wages growth vs inflation, January 2016 – July 2020
Consumer confidence
Figure 20: Mintel Financial confidence tracker, January 2019 – June 2020
Looking forward
SECTOR FOCUS – GROCERY RETAIL
Retail sales recover in June
Figure 21: All retail sales (ex-fuel), non-seasonally adjusted, January 2019-June 2020
Store-based online grocery sales continue to surge
Figure 22: Annual % change in all grocery retail sales and store-based online grocery retail sales
Consumer still try and limit time in stores
Figure 23: % of consumers who are limiting time spent in store, by age group, July 16-22 2020
Retailers develop online capabilities to meet surging demand
LAUNCH ACTIVITY AND INNOVATIONS
UK: Asda rolls out high-tech trolley cleaning machine
UK: Lidl rolls out its Plus rewards and loyalty app in the UK
UK: Selfridges launches The Bike Shop
HEADLINES FOR THE MONTH
Convenience stores
Grocers
Other food specialists
Clothing retailing
Multi-sector retailing
Department stores
DIY retailing
Electrical retailing
Furniture retailing
Homewares retailing
Online
Health and beauty retailing
Sports and leisure goods retailing
Jewellery retailing
Pets and pet products retailing
NEWS ANALYSIS – FOOD AND DRINK
 CO-OPS
UK: Co-op
…staff wear face masks early on to encourage use
…John Lewis extends click-and-collect partnership with the Co-op
 CONVENIENCE STORES
UK: McColl’s profits and sales slip amid ‘extraordinary change’ since the onset of COVID-19
 GROCERS
UK: Asda trials autonomous floor cleaning robots in three stores
UK: Iceland blames widening losses on tough trading conditions and Brexit
UK: Lidl
…to open one new store per week over the next six months
…opens 100th store in London
UK: Morrisons enters meal kit market with £30 recipe boxes
UK: Sainsbury’s is launching a virtual queuing system
UK: Tesco trials reusable packaging in collaboration with Loop
UK: Waitrose launches drive-through online grocery collection at 70 stores
 OTHER FOOD SPECIALISTS
UK: Holland and Barrett reveal new ‘wellness’ format in Essex
UK: Hotel Chocolat to meet profit expectations as sales rise
NEWS ANALYSIS – CLOTHING AND FOOTWEAR
 CLOTHING RETAILING
UK: Arcadia Group up for another restructure
UK: Baird Group set to launch CVA risking the closure of 18 stores
UK: Boux Avenue confirms the reopening of its remaining and remodelled stores
UK: French Connection turns to Hilco to boost liquidity
UK: Jack Wills to launch kidswear
UK: Joules sales down 25.3% as COVID-19 impacts performance
UK: M&Co’s pre-pack administration deal saves 2,200 jobs and 218 stores
UK: Mango profited from continue focus on ecommerce growing sales by 20% in H1
UK: Moncler posts first ever operating loss due to Covid-19
UK: Next sees online sales grow 9% in spite of fall in store sales
UK: Primark rolls out clothing recycling scheme across UK stores
UK: Roo’s Beach reveals own-brand clothing and accessories line
UK: ‘Severity of Covid-19’ knocks Matalan revenue by 72%
UK: Superdry opens new asset backed loan facility to ‘secure’ its recovery post-COVID-19
UK: Thomas Pink closes London flagship after reopening it in June
NEWS ANALYSIS – MIXED GOODS
 MULTI-SECTOR RETAILING
UK: Argos scraps catalogue after 47 years as consumers shift online
UK: Halfords
…earmarks 60 stores for closures due to COVID-19
…launches government's bike repair vouchers
UK: M&S
…expands Mobile Pay Go tech to 310 stores
…Ted Baker and Harvey Nichols brace for job cuts
…M&S cafes joins the governments ‘eat out to help out’ scheme
UK: Poundland
…latest to launch range of reusable face masks
…to launch online delivery as part of ‘biggest ever transformation’
UK: The Original Factory Shop launches home delivery for the first time
 DEPARTMENT STORES
UK: Debenhams
…to reopen 9 remaining stores in Scotland next week
…reportedly up for sale
UK: Harrods expects sales drop as visitor numbers plummet 95%
UK: House of Fraser site in Richmond to be converted into retail and leisure centre
UK: John Lewis
…risks 1,300 jobs as it plans to close eight stores
…unveils virtual personal shopping service
UK: Selfridges announces 450 job cuts
NEWS ANALYSIS – HOUSEHOLD GOODS
 DIY RETAILING
UK: B&Q owner Kingfisher sales rise thanks to ‘strong demand’
UK: Travis Perkins half year sales drop 20%
 ELECTRICAL RETAILING
UK: Dixons Carphone
…full-year profits drop due to poor performance from its mobile division
…to make 800 redundancies as it overhauls in-store management operations
UK: Dyson to cut 900 jobs as consumers shift online
 FURNITURE RETAILING
UK: DFS reports a 27% fall in sales but online soars 77% year-on-year
UK: ScS ‘encouraged’ by reopenings as orders rise
 HOMEWARES RETAILING
UK: Dunelm sees ‘significant’ surge in online sales during lockdown
NEWS ANALYSIS – ONLINE
UK: Asos and Next call for government action on UK worker exploitation
UK: Dr Martens owner among investors bidding for Gymshark stake
UK: Eve Sleep narrows losses despite sales slide
UK: Naked Wines expects wine to surge 78% since lockdown
UK: Ocado
…half-year sales boosted by increased demand during lockdown
…takes in new customers for first time in 4 months
UK: PrettyLittleThing to launch homeware range
NEWS ANALYSIS – OTHER RETAIL
 HEALTH AND BEAUTY RETAILING
UK: Boots
…launches PhysioFast Online for customers via teleconferencing
…to cut 4,000 roles at its head office
UK: The Perfume shops sees boost in sales during lockdown from virtual shopping
 BOOKS AND STATIONERY RETAILING
UK: Card Factory revenues exceed expectations
UK: Redundancies at Waterstones HQ as some stores remain shut
 SPORTS AND LEISURE GOODS RETAILING
UK: DW Sports to close retail portfolio and gym chain amid COVID-19
UK: Frasers Group
…hits out at business rates revaluation delay
…announces plans for new megastore in Leicester
UK: The Gym Group reports a loss of 178,000 members during lockdown
 TOY RETAILING
UK: Hobbycraft to continue workshops and demos via Zoom as online sales drive full-year profits
 GARDEN CENTRES
UK: Dobbies & Sainsbury’s launch grocery partnership
 JEWELLERY RETAILING
UK: Swarovski unveils digitised ‘Crystal Studio’ concept to UK
 PETS AND PET PRODUCTS RETAILING
UK: Pets at Home sees sales slip in first quarter as pet ownership increases during lockdown
 SHOPPING CENTRES
UK: Hammerson obtains £75m government support
UK: Westfield
…centres rental income hit by coronavirus
…plans to turn House of Fraser site into office space approved
UK: Regent Street owner The Crown Estate offers switch to turnover based rents
NEWS ANALYSIS – ECONOMY
UK: June sales increase 10.6% as lockdown restrictions ease
UK: BRC
…June footfall falls 62.2% as non-essential stores reopen
…footfall makes a slow recovery in July as shops begin to reopen
UK: Face masks will become mandatory for shops in England from July 24
UK: Retailers call for clarity on face coverings in shops
UK: Half of shops reopened since June as consumers continue to stay at home
UK: Retail sales return to pre-Covid levels