We’re reporting on the effect of the Covid-19 coronavirus pandemic on the way UK shoppers buy – and on how retailers are responding to that changing behaviour. This update comes as 55,242 positive cases have been confirmed by Public Health England as of 9am on April 7 and 6,159 people have died. Daily figures show 3,634 cases and 786 deaths over the previous 24 hours.
TESCO SEES 30% SALES BOOST FROM CORONA, BUT COSTS MOUNT TOO
Tesco has seen sales rocket by 30% in the first three weeks of March as panic buying set in – adding some £2 billion in extra revenue. However, sales have now stabilised and the retailer is now assessing how its wage bill, supply costs and other unexpected costs from Corona could impact its bottom line.
While paying out a £625m dividend, the retailer has warned that it could face up to £925m in extra costs on its 2020/21 bottom line as a result of the lockdown.
The retailer is keen to stress that, should things return to some semblance of ‘normal’ by August, however, this could be mitigated. Tesco is also joining calls to shoppers to come back to stores to buy, as pressure on its delivery and click and collect services is “unsustainable”. Read the full story here.
SUPERDRY, MONSOON, INTU AND FRANKIE & BENNY’S COULD ALL CLOSE POST-CORONA
Superdry, Monsoon, INTU and Frankie & Benny’s are all likely to not survive on the High Street as coronavirus lockdown impacts underlying health issues that each of these businesses faced.
According to research by forex and stock market analysts at AskTraders, these brands all had underlying problems before the current crisis and, as a result, are unlikely to survive in the way we know them now as the lockdown continues.
M&S, Debenhams and Next are all also at risk, the analysis shows, but there are strong reasons why they are likely to survive. Thorntons and WHSmith are both tipped to emerge intact when the crisis passes, as will Wagamamas. Read the full story here.
ASOS AND H&M RAISE CAPITAL TO WEATHER LOCKDOWN
Both ASOS and H&M have joined a growing cohort of retailers raising capital on stock markets to see them through the coming months of turmoil.
ASOS, which posted encouraging results for 2019/20 this week – sales up 20+% worldwide – has seen a 25% slump in the first three weeks of March. As a result, it is looking to raise 18.8% of share capital and a further £60m to £80m by extending its RCF.
H&M has also turned to the money markets, signing a new 12 months €980m revolving credit facility with a six months extension option in order. Read the full story here.
MORRISONS TEAMS UP WITH DELIVEROO FOR “ON DEMAND DELIVERY” OF ESSENTIALS
Morrison’s and Deliveroo have inked a deal that will allow shoppers to order from 70 essential food and household items for on-demand delivery in as little as 30 minutes.
The service will be available from more than 130 Morrisons stores across the UK and covers one in four households. Customers will be able to order on the Deliveroo app or website, with ‘contact-free’ delivery by riders. All items will be priced the same as Morrisons stores with a flat delivery fee of £4.99. The service will last for the duration of the crisis.
Morrisons Chief Executive David Potts says: “Our partnership with Deliveroo will help us to continue to play our full part in feeding the nation. Customers will be able to order essential products from Morrisons biked by Deliveroo to the door in as little as under 30 minutes. It’s a great combination of traditional and modern methods and it will provide more vulnerable people with the opportunity to receive their home delivery.” Read the full story here.
AMAZON PRIME DAY POSTPONED
Amazon looks likely to postpone this year’s Prime Day which usually takes place in July to “at least August”, according to reports from Reuters.
The company hasn’t commented, buy those in the know suggest that it will now happen in August or later and that Amazon is facing righting off as much as $100m in devices that it has stockpiled ahead of the event.
On the plus side, the Amazon Prime video on demand service is likely to add $100m in extra revenue to the company coffers as more people turn to paid streaming services during lockdown. Read the full story here.
SAINSBURY’S AND COMIC RELIEF TEAM UP TO RAISE MORE FOR COMMUNITIES HIT BY CORONA
Sainsbury’s has pledged its support to a new joint appeal to raise money for people of all ages and backgrounds across the UK who are likely to be severely affected as a result of Covid-19.
The supermarket, which has raised over £130 million during its partnership with Comic Relief, will be matching donations given by customers as part of its ongoing mission to feed the nation and support the communities it serves – with funds raised split evenly between Comic Relief and BBC Children in Need.
By matching the total money raised, donations will go twice as far to help people and local communities who need support the most. This funding will not only provide vital emergency support to ensure vulnerable people are safe, warm and fed, but will keep them connected in order to combat isolation and loneliness.
Customers will be able to donate at tills in-store by rounding up their bill to £1, £5, £10 or £15 on manned checkouts or by adding £1, £2, £5 or £10 donations to their basket on self-service checkouts. Those shopping for groceries online or on our Habitat site can donate by adding a donation of £1, £2, £5 or £10 to their online delivery basket before checking out. Alternatively, customers can donate online at www.sainsburys.co.uk and www.argos.co.uk by following the links to ‘The Big Night In’ or by giving their Nectar card points to the value of £2.50, £5 or £10.
ONLINE MARKETPLACE FRUUGO OFFERS FREE COURIER DASHBOARD AND ADVICE IN EUROPEAN VAT ‘HOLIDAY’
Online marketplace Fruugo has developed a new courier dashboard that tracks the status of couriers across the globe and summarised the variety of schemes launched by European governments that retailers can take advantage of in the current climate to help SMEs trade.
As part of its new developments, Fruugo has launched its Courier Network Status Dashboard which provides a single location to view the operational status of the top global couriers in over 40 countries. The tracker shows where there are delays and/or restrictions and aims to help retailers guide their customers and continue to provide essential products in these challenging times. With the ever-changing nature of the crisis, Fruugo is continually monitoring the latest releases from governments and logistics providers to ensure its sellers stay up to date on movements.
Also part of the global marketplaces continued efforts to help retailers weather the COVID-19 storm, the online marketplace has worked with Taxmen, a specialist in tax and legal services for the e-commerce sector, to develop of a summary of VAT Breaks/Holidays across Europe.
SHPOCK LAUNCHES CONTACT-FREE EXCHANGE OF SECOND-HAND GOODS TO HELP USERS DURING SOCIAL DISTANCING
Mobile marketplace Shpock has formed a partnership with Parcel2Go to offer door-to-door contact-free deliveries. This means anyone can sell the electronics and clothes they no longer need on Shpock – and get it to any buyer in the UK without ever leaving their home.
To get sold items delivered to the buyer with Shpock’s contact-free option is simple. All the sellers has to do is book a pick-up and leave the item outside their door for collection at the time specified by the courier. Once safely back inside, the courier will pick up the item.
Shpock is partnering with Parcel2Go and deliveries will be fulfilled by Parcelforce and Hermes.
Selling an item on Shpock is still completely free. Shpock is helping in the social-distancing cause by taking on a portion of the additional charges for contact-free door-to-door delivery. Thanks to this measure it hopes that its users will still safely enjoy buying and selling the most popular items such as clothing, games and electronics.
Esteve Jané, CEO of Shpock, says: “The newly launched contact-free door-to-door delivery helps our community stay safe at home, while continuing to give second-hand items a new lease on life. To help make this possible, Shpock is covering most of the extra costs of this delivery service during these extraordinary times.”
FOOD, ELECTRONICS AND HOME GOODS DOING WELL, CARS, WHITE GOODS AND PROPERTIES LESS SO
Ecommerce revenues and conversions for Food, Electronics and Home goods have seen a rise due to the impact of Covid-19, with food the fastest rising category, seeing online spend up 75% week-on-week, as demand for online grocery deliveries continues to soar. Homeware and electronics were also up 36% and 30% week-on-week, the figures from BounceX reveal. Read the full story here.
Meanwhile, 41% of UK consumers are delaying major purchasing decisions due to the current situation, with the most likely products to be delayed being white goods (15%), cars (9%) and properties (6%).
Forty per cent of consumers plan to spend as little as possible for the coming months, with 47% of UK consumers saying that the Coronavirus crisis will have a significant impact on their spending habits over the next 12 months, according to this week’s instalment of Mapp Digital’s Covid-19 Consumer Confidence Report. Read the full story here.
THE CONSUMER SHIFT TO ECOMMERCE WON’T BE REVERSED – BUT 2020 COULD STILL BE A SUCCESS
Consumer research by Kantar across the UK, France and Germany, finds that six out of ten consumers in the UK say that they will continue to buy as much online as they do today after the pandemic has passed. In fact, 70% of 25 - 34-year olds said they would continue to shop online for sports and fashion apparel for the rest of 2020 followed closely by 65% of 16 – 24 year olds.
Kantar also found that more consumers across all age groups intend to shop online for consumer electronics for the rest of 2020 including 55% of baby boomers and 66% of millennials. 62% of 45 – 54 year olds and 67% 55-64 year olds prefer bricks and mortar for their health and beauty purchases rather than shopping online.
The study, commissioned by Detail Online, also shows that the share of consumers that do more than half of their total purchases online has increased with between 25 and 80 percent since the outbreak of Covid-19.
“2020 is not lost,” says says Detail Online founder, Joakim Gavelin. “Right now, there’s a huge potential for brand owners to increase online sales in 2020. This report tells us that the change in consumer behaviour that many expected to take three to four years is instead happening in a few months. To be a winner in this you need to have as good control of your products online as you would at a physical retailer. One example is that up to 40% of items can be wrongly listed as out of stock at an online retailer, and that was before the massive shift we have experienced now. I cannot even imagine how those numbers might be now, given the present pressure on the online retailers.” Read the full story here.
LOCAL SHOPS GET THEIR OWN ONLINE OFFERING
With many shoppers turning to their local shops for groceries, a UK entrepreneur has developed an e-commerce product that will enable local retailers to provide their products through an online shop. The software is called BuyLocalShops.com and will let shops supply goods to their local communities.
When a shop signs up to the service they are able to access their own area on the buylocalshops.com website. They then record the quantity and price of individual goods that they want to make available through the online shop. Once this is completed the shop can be online within 15 minutes.
All of the retailer’s stock is updated and live in real-time on the BuyLocalShops.com website. Customers are then able to buy goods through a click and collect service. Shops can also offer a local delivery service.
BuyLocalShops.com has been developed by Russ Whitlock, who said: “The concept is simple, get local shops more business and get local communities to buy locally. The technology is simple to use and means that the local store can have an online store up and running in minutes."
He adds: “Many local stores have reluctantly had to close their doors to regular shoppers as they were unable to effectively adopt social distancing measures. This offers them a way to continue trading without large numbers of people entering their shop. Of course, for those grocery shops that have continued to remain open it provides a great way for them to provide an additional service to their customers.”
VOLUNTEERS USE 3D PRINTERS TO MAKE FACE SHIELDS TO NHS – AND DPD DELIVERS THEM FOR FREE
Thousands of volunteers across the UK are giving up their time to use their 3D printers to make the components to create face shields – a full-face visor on a plastic headband – which protects the whole of the front of the face – and DPD will deliver them for free.
DPD is collecting the component parts from all the different volunteers – who have formed 3DCrowd, a community of 3D printer owners who are using their machines to help alleviate the acute shortage of personal protective equipment (PPE) for frontline healthcare workers – and delivering them, free-of-charge, to a central hub in Sheffield where the face masks are being assembled by a company called Pimoroni. DPD will then distribute the completed visors to hospitals, GP practices and other healthcare organisations around the country.
The design for the masks was supplied by Josef Prusa, a 3D printer based in the Czech Republic. Volunteer printers have been supplying their own materials to produce the shields. 3DCrowd has also been collecting donations through crowd funding.
Dwain McDonald, DPD’s CEO commented, "This is a really smart example of a community working together and shows how our nationwide network can be used to support key services at this time. Our healthcare workers are doing a fantastic job - despite the exceedingly difficult situation they find themselves in. The supply of the much-needed face-shields is crucial, and we are delighted to be able to help."