Alongside our regular newsletter, we round up the other stories of interest to multichannel and ecommerce retailers this week. Today we cover Moonpig, footfall, Hammerson and post-Brexit VAT for smaller retailers
Moonpig to float
Moonpig today announced plans to float on the stockmarket at a time when the UK’s shoppers are taking more of their purchases online. The greetings card pureplay aims to raise £20m by selling off at least 25% of shares in the business.
Moonpig chief executive Nickyl Raithatha says: “As leaders of a market undergoing an accelerating shift online, we’re delighted to bring Moonpig Group to the public market. Our data-powered technology platform makes it incredibly easy for our customers to create more special moments for the people they care about. With our curated gifts and personalised cards, high-speed logistics and unique predictive insights into gifting intent, we make the art of remembering, choosing and creating the most thoughtful card and gift as effortless as possible. As the market leading platform, with a strong track record, and a huge opportunity to grow, we are confident about our decision to become a publicly traded business.”
Cost of VAT post-Brexit
Small UK businesses face a mounting cost of VAT when they sell to European Union customers following the end of the Brexit transition period, according to one tax expert.
Richard Asquith, VP of VAT at tax technology business Avalara, says that UK retailers who want to sell to customers from four EU countries must now register for VAT separately in each state that they want to sell in. Since 2017, UK retailers incurring up to €10,000 a year in VAT from EU sales have been able to sell to customers across EU borders using their own UK VAT number. At the time the European Commission estimated that cost businesses £7,200 a year, per state – taking the cost of selling in four European markets, as many small sellers do, to £28,800 a year. Now they must register for VAT in each EU state that they sell in.
Asquith says: “We estimate there are 27,000 UK small businesses who have been using their UK VAT numbers across the EU. Many of these are simply earning too little to support such a large hit to the bottom line. We are seeing most of them now geo-blocking from their websites many EU countries to avoid the tax bill.”
Footfall continues to decline
The number of people visiting UK shops fell by 10.9% last week, compared to the previous week. That’s lower than the previous week, when footfall had dropped by 27.1% following the start of the new lockdown. The sharpest decline is in shopping centres (-14.6%), followed by high streets (-11.5%) and retail parks (-5.8%).
Footfall was down by 67.5% compared to the same time last year - although it is yet to reach the levels (-82.2%) seen at the height of the first lockdown.
Diane Wehrle, insights director at Springboard, says: “In what was the second full week of lockdown across the UK, footfall in retail destinations once again declined from the previous week, although the rate of decline slowed to less than half of that in the week before. This means that the annual decline in footfall has still not equalled either the lowest level in Lockdown 1 or even the level in the second week of Lockdown 1.”
Hammerson says its shopping centre footfall was stronger over Christmas
Retail property developer Hammerson says that the number of visitors to its shopping centres and retail parks recovered during the Christmas trading period, from November 30 to December 24, after previous lockdowns eased. Footfall at its UK shopping centres peaked at 60% of the previous year, while retail parks had the same number of visitors as they did a year earlier - at their busiest times. At the same time, up to 75% of its occupiers in the UK were open or offering click and collect.
Under the restrictions of the latest UK lockdown, about a quarter of occupants are open as as essential retailers, or offering click and collect, takeaway and delivery services. Footfall has declined accordingly.
Hammerson says its rent collections have increased following new agreements with many of its tenants, with 36% of rents at UK flagship shopping centres that were due for the first quarter of 2021 now paid, and 64% at its retail parks.
The company says it continues to maintain high levels of liquidity, with access to £1.2bn in unused but available credit.