In today’s InternetRetailing newsletter, we’re reporting as retailers respond to the huge changes in retail that Covid-19 has forced over the last year. In doing so, they are themselves reshaping the way that shoppers buy.
Some have been able to respond quickly to the changing environment. Screwfix, for example, says this week that it has turned over £2bn for the first time, in a year in which it was well-placed to serve shoppers who suddenly had to stay at home - and turned to online shopping.
H&M Group says its existing digital infrastructure had put it in a good starting place when the pandemic hit. Its ability to serve online shoppers from an integrated multichannel model meant it was still able to turn a profit – albeit one that was much smaller as sales fell by 18%. In the coming year, however, it will close a net 250 stores, many in more established markets where it already has high brand awareness, and open 100 in newer markets.
It’s in cutting stores that Paperchase, too, has found its solution to a crisis that hit it particularly hard in the run up to Christmas – at a time of year when it usually makes 40% of its sales. It is now cutting its store numbers to an expected 90, via a pre-pack administration and sale to investors backed by Permira Debt Managers.
That’s reflected in figures out today from the British Retail Consortium and Local Data Company, showing the extent to which shops have closed in the last year. Some 14% of UK shop spaces were vacant in the last quarter of 2020 – and 17% of those in shopping centres.
More shops still seem likely to close, if Boohoo Group’s talks to buy Arcadia brands Dorothy Perkins, Wallis and Burton come to fruition - and if Asos succeeds in its bid to buy Topshop, Topman, HIIT and Miss Selfridge. Disruption will only continue in months to come. We’ll watch with interest to see what that means for the future shape of the high street.
In today’s guest comment, Simon Batt of Asendia UK asks if retailers are ready for carbon neutral delivery in 2021 – and, if not, how to get there.