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EDITORIAL From Asos and Boohoo to Dunelm, Frasers Group and the Co-op: how Top500 retailers are adapting after ‘most disruptive year ever’ for retail

A shopper collects a Dunelm online order by car. Image courtesy of JRNI

A shopper collects a Dunelm online order by car. Image courtesy of JRNI

The last year of Covid-19 has been, Asos said this week, the most disruptive ever for retail. Shoppers have firmly shifted online to buy in a year when many shops have been forced to close for months at a time – and the pureplay has been well-placed to take advantage of that appetite. This week it reported full year pre-tax profits up by 250% on the previous year and it’s now planning to the infrastructure needed for further expansion around the world.

That’s also the theme for fellow pureplay Boohoo, which has now taken on enough warehousing to support turnover of £4bn. That’s a figure its acquisitions of Dorothy Perkins, Wallis, Burton and Debenhams will help it towards.

But the disruption that has so benefited pureplays has come at the expense of multichannel retailers. Today Frasers Group says it is counting the cost of Covid-19 on its own multichannel businesses, all with significant high street presences – and it is planning to write down assets including its stores by a further £100m in the second half of the year alone – taking it to a full-year write down of at least £324.9m. 

Dunelm has used its multichannel capabilities and come close to making up for its stores having to close in lockdown 3.0. It has covered 83% of its previous turnover as shoppers turned online to buy – and says click and collect alone made up for 35% of lost store sales. 

Ryman, Robert Dyas and Boux Avenue owner and chairman Theo Paphitis says his businesses have expanded online while stores have been closed in lockdown 3.0 – but the next four months will be crucial in understanding how shoppers – many already or soon to be vaccinated against Covid-19 – will want to buy in future. But in any event, he says, any return for business rates, he says, has the capacity to be catastrophic for physical retailing. 

The disruption hasn’t, of course, hit all multichannel retailers equally. The Original Factory Shop is expanding both through new stores and through multichannel services after prospering during the pandemic as an essential retailer. 

And the Co-op says it saw its highest ever share of the grocery market in April 2020, immediately following lockdown. Today it is delivering groceries to the home via 800 of its local convenience stores – and a broad range of delivery partners. 

Today’s guest comment comes from Nigel Parson of finnCap, who considers what kind of retailers are proving to be retail’s post pandemic winners.  

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