More than half of UK retailers have made no preparations for a second wave of Covid-19, with just 56% saying their business could survive another widespread lockdown.
A survey by Brightpearl found that 54% of retailers have made no changes to their business model in the event of a second wave in the autumn or winter. The health and beauty sector is the least prepared for a second wave with 75% of companies saying they have made no preparation.
Other sectors failing to adapt to the prospect of a second wave include fashion brands (62% have made no changes to their business model) and entertainment brands (57% have made no changes.)
Overall, fewer than half of retailers (42%) are planning any further digital investment to better prepare their business for future spikes in the virus and only 56% of retailers said their business could survive the devastating impact of a second wave with widespread lockdowns returning.
The survey also showed big differences in the regional response to the prospect of a second wave. Eight out of ten retailers in the South West (79%) were geared up for a second wave – the highest figure in the UK – compared to just 21% of retailers in Yorkshire and Humberside, the lowest figure.
The survey revealed a huge shift to digital and away from bricks and mortar stores since the pandemic hit the UK six months ago. More than half of the UK’s retailers (56%) plan to switch their retail focus to online over the next 12 months.
Four out of ten (39%) said their online sales were higher than pre-crisis, while a fifth (22%) said they planned to close physical stores in the next year.
Sport and leisure brands are planning the most closures with 50% saying that shops will shut, followed by electrical firms (36%), fashion brands (30%), and home and DIY stores (25%).
Brightpearl CEO Derek O’Carroll says: “Covid-19 is the retail equivalent of a meteor impact: an existential event that changes the composition of the industry and, sadly, as we’ve witnessed, the eradication of many businesses. We’ve seen huge digital transformation in the retail industry in a matter of months as companies look to adapt to the disruption, but the majority simply haven’t had the time to consider and plan for what the future looks like post-pandemic. That’s a dangerous position to be in, especially with the looming threat of a second wave of the virus.”
Brightpearl has developed a free online health check to help retailers to gauge whether they are ready for a second wave of the Virus. The Brightpearl five-minute quiz measures whether retailers are fit enough to beat a Covid-19 resurgence by giving them a health grade from A (full fitness) to F (fail).
O”Carroll adds: “Our free business health checker has been designed for busy firms to quickly assess the health of their current retail operations. Now, more than ever, it’s vital to take stock and understand what areas of the business need a tune up – its long-term survival may very well depend on it.”
Figures show that more than 3,700 UK firms have gone bust since lockdown began. Bristol-based Brightpearl’s online tool includes second wave survival tips to retailers depending on their size and whether they sell through Amazon and eBay.
Brightpearl works with thousands of retailers and has been collating data on the common factors behind why brands have experienced success or failure during the crisis – all of which has been distilled into the new tool.