Twitter
Facebook
Linked In
RSS
Login or Register
New to InternetRetailing?
Register Now
Internet Retailing
You are in: > Home > Themes

UPDATED Coronavirus round-up: more stores close their doors, retailers focus online – and on delivery

Linked InTwitterFacebookeCard
Sharelines

Coronavirus round-up: more stores close their doors, retailers focus online – and on delivery

We’re reporting on the effect of the Covid-19 pandemic on the way UK shoppers buy – and on how retailers are responding to that changing behaviour. This update comes as 6,650 positive cases have been confirmed by Public Health England as of 9am on March 23 and 335 people have died.

 

The Covid-19 effect on ecommerce: analyst

Many companies will not survive the initial phase of coronavirus – but many retailers will see their business move further online as a result, predicts GlobalData, as even sceptical consumers are forced to abandon physical stores in response to restrictions on movement.

 

Ed Thomas, research director at GlobalData, said: “The impact of Covid-19 will be most noticeable in the food and grocery segment, where online penetration is currently lower than average across the retail sector.

 

“While food and grocery sales surge, clothing and footwear retailers will suffer as consumers are forced to work from home, events are cancelled, and pubs and restaurants closed. Online channels will fare better than high-street stores, but retailers such as Asos and Boohoo will still see a significant reduction in sales.”

 

Dunelm rethinks Covid-19 response

Dunelm says it’s going to be looking again at the way it responds to the Covid-19 pandemic, in the light of Prime Minister Boris John’s decision to close all non-essential retail stores, while strengthening the way it does business for the future. Read our story here.

 

Non-essential stores shut down: what are the new rules, how are retailers responding?

The shutters are down at stores across the UK today after the Prime Minister ordered all non-essential retail shops to close in response to the Covid-19 pandemic. Here’s our story on what the new rules cover, and how retailers are responding.

 

Games Workshop closes down all its operations

Games Workshop said that although its trading in the nine months to the end of February was in line with expectations, it has since been hit by the outbreak of Covid-19.

It is closing all of its stores, headquarters, factories and warehouses immediately, in response Government guidance. Staff will work from home where possible.

"As the situation develops," it said today, "we will provide an update on the possible impact of these necessary actions on the group’s performance for the year to 31 May 2020 and going forward."

JD Sports: stores leave gap in revenue that online is not bridging

JD Sports today said that all of its stores were now closed in the UK, United States and Europe – stores that would in a typical week account for “substantially all of the group’s physical store sales”.

 

It says that while its websites are showing a “resilient performance” as they continue to accept and fulfil orders this is a “comparatively small mitigation” that does not make up for the loss of store sales. It is limiting spending “across all aspects of our business” to preserve cash.

 

JD Sports executive chairman Peter Cowgill said: “Along with everyone else, the group is experiencing major disruption to our business operations as we seek to protect our colleagues and customers from the effects of Covid-19.”

 

He added: “JD continues to offer a market-leading multichannel proposition in sports fashion retail and we are confident that we will emerge from the current challenges in a strong position to resume our previous positive momentum.”

 

Sports Direct says it will close its UK stores – after all

Sports Direct has confirmed that all of its Sports Direct and Evans Cycles shops will be closed today – although reports suggest it had earlier sought to keep them open as an "essential" retailer.

 

Sports Direct finance director Chris Wootton said in a statement today: "We will not open our Sports Direct or Evans Stores to the public, even though government policy excludes ’bicycle shops’ from closure until we are given the go ahead by the Government."

 

The retailer says it is working "at all levels" to get clarification from the Prime Minister on the implications of the government policy. However, Cabinet minister Michael Gove told the BBC that there was no reason for Sports Direct shops to stay open following the government ruling that all non-essential retail shops should close.

 

’Severe impact’ of Covid-19 likely to mean second-half loss at Mulberry

Mulberry says trading in its now-closed stores has been “severely impacted by the Covid-19 crisis”.

 

It closed its stores on March 21 and is reviewing its international stores on a case-by-case basis. Its current financial year ends on March 28 – and it said today that whereas it had expected to make a profit in the second half of the year it now expects to make a small loss.


The retailer said it was holding cash of £8.8m and had a further £19m available in lending that it has yet to draw on. It has decided to suspended shareholder dividends for the time being.

 

Thierry Andretta, chief executive at Mulberry, said: “Our highest priority at this time is the health and safety of our colleagues, customers, and all other stakeholders. Whilst it is uncertain how long the virus will directly impact our markets and our businesses, we remain confident in the strength of our brand, and in our strategy over the long term.”

 

Shutters come down at the UK’s retail stores

Only grocers, pharmacists and other essential retailers will be open today after the government announced that all non-essential shops would close. That has sparked some debate about what constitutes essential – Sports Direct, for example, has argued that its stores are essential for those looking to keep fit during the pandemic. However Cabinet minister Michael Gove today told the BBC that there was no reason for Sport Direct branches to stay open. Full story to come.

 

What are shoppers looking for online?

There has been a huge shift in consumer search behaviour amid concerns over the virus, says search specialist Adzooma.

 

Adzooma explored the rise in search volumes of 10 different keywords, in more than six European countries, including the UK, Ireland, France, Spain, Italy, and Germany. For comparison purposes, the research also included the USA and Australia.

 

Rob Wass, co-founder and chief executive of Adzooma said: “Our data found that searches for face masks went up by well over a million between November 2019 and February 2020. Hand sanitiser searches also skyrocketed, particularly in Italy, where they went from 2,390 in November to 415,870 – an unprecedented growth. In fact, in one week on Amazon UK sales of hand sanitiser increased by 560% and the average price increased 128% from £13.33 to £17.07."

 

The Works to close stores

The Works today said it would close its stores from tonight in order to "encourage social distancing for the safety and wellbeing of its colleagues, customers and the wider community". It will continue to sell online over theworks.co.uk website unless further restrictions are put in place.

 

It said before footfall fell during the Covid-19 pandemic, sales had grown by 2.9% in the nine weeks to March 15, with growth both online and in stores.

 

"Last week, despite declining high street footfall, the group experienced a significant uplift in sales, both in stores and online, as customers demanded products to support their child’s ongoing education, mindfulness material to support mental health or products to ’beat the boredom’ during this period of social distancing," it said in today’s update.

 

It is suspending non-essential capital investment, including new stores except those where it is legally committed, and minimising discretionary operational spending. It is talking to landlords about reducing rents on closed stores. It will also review its spending plans on stock.

H&M moots cancelling its dividend payout

Fashion retailer H&M says it is considering cancelling its planned dividend payout after a week in which all of its German, US and UK markets have been shuttered, leaving 3,441 of its 5,062 shops open. Customers can buy online in 50 markets.


It is reviewing all of its operations, including costs and investments, on a market-by-market basis and is now considering cancelling its latest dividend.

 

Stefan Persson, chairman of the board, said: "Since we on the board of directors presented our original dividend proposal, the market situation has changed drastically. In the light of the current situation and the uncertainty about market developments, the board has today decided to withdraw its earlier dividend proposal of SEK 9.75 per share, approximately SEK 16 billion in total, and is instead proposing to the 2020 annual general meeting that no dividend is paid. I am convinced that this is the best decision in this situation in order to further strengthen the company’s already strong financial position and thereby secure our freedom of action going forward."

 

H&M chief executive Helena Helmersson said: “We are doing everything in our power in the H&M group to manage the situation related to the coronavirus. My hope is that we will be able to get operations up and running again as soon as possible and welcome back all our customers in all our 74 store markets. This is an extraordinary situation in which we are forced to make difficult decisions, but with every challenge there are also opportunities and I am convinced that we as a company – once we have made it through this – will continue to stand strong."

 

 

Government reported to be talking to retailers including Amazon to deliver tests

 

Amazon has declined to comment on an FT report [paywall] that Amazon and other retailers are talking to the government about delivering Covid-19 tests to frontline healthcare and social care workers. The FT says the move has come as an online petition asking for NHS workers to receive tests has topped 1m. It also suggests that home deliveries of the tests to the wider public could follow.

 

The scale of plummeting footfall

New figure from Springboard show the scale of how store visitor numbers fell over the last week as coronavirus hit. The full story is here.

 

InPost sees fast growth in its lockers for click and collect

As more shops close, some retailers are suspending their click and collect services. But InPost says it has seen a 60% rise in use of its social distancing-friendly lockers over the last week. It says the growth has come as consumers look for contact-free options to receive online orders or send out parcels.

 

InPost’s lockers are always available so that shoppers can use them when they feel it’s likely to be quiet, and since they are self-service there is no need for human interaction.

 

Customers open the lockers by scanning a QR code on a mobile phone, picking up, or returning, their online orders. There are currently more than 850 InPost locations, from major supermarkets such as Morrisons to rail stations and petrol stations. InPost also works with major couriers including Hermes, DHL Express and DX.

 

Kingfisher Group delays full-year results

The Kingfisher Group, owner of B&Q and Screwfix, says it will be following an FCA request to delay its financial results. The figures and been due out this week but publication will now be postponed for at least two weeks.

Card Factory closes its stores

Card Factory now says that it will close all of its shops from the end of today. In an earlier update the retailer, ranked Top350 in RXUK Top500 research, said it had seen a "very material" drop in visitors to its shops since the Covid-19 pandemic broke out.

 

In its year so far, before the appearance of Covid-19, it said, its online website had helped it to offset declining high street footfall in a way that reflected "improvements to the online portal and the positive response to the enlarged range of cards, gifts and party products."

The retailer is delaying the opening of seven new stores that it is legally committed to to the second half of the year, but will otherwise reduce non-essential spending and investment. It is also talking to its landlords about rents.

It said its net debts of £137m were currently well below its £200m credit availability, in place until 2023.

Looking ahead, it said: "We remain confident that the long-term demand for cards and gifting remains robust, with people wanting to share sentiment around special occasions. Management remains focused on the delivery of its strategic business improvement initiatives which will ensure that Card Factory is best placed to meet this demand."

Ted Baker sees online sales rise as stores close

Ted Baker says most of its shops (384 out of 416 worldwide) are now closed – and says online sales have risen by 16% in the last eight weeks. Store sales, it says, represented 68% of retail sales in its latest full year – but the focus is now online. "The ecommerce service continues to operate for customers as normal, and is a channel the Group will be intensively managing during this period of store closures," it said in today’s Covid-19 update.

 

It says that its supply chain has seen only minimal disruption and that it has enough stock. It has also welcomed the Government’s support for business rates and said pre-tax profits in its 2020 full year were expected to come in at between £5m and £10m. It has cut back on discretionary expenses and is restricting travel. It is talking to the Government, the HMRC, landlords and suppliers as it looks to cut costs.


The update came as the retailer said it had completed the sale and leaseback of its head office for £78.75m.

Rachel Osborne, Ted Baker acting chief executive, said: "The sale and leaseback of the Ugly Brown Building and future relocation of our head office are significant developments resulting from the broad asset review we have undertaken in recent months.

"This transaction and the agreed additional financing provides further headroom and flexibility, which will support the delivery of our transformation strategy.

"The spread of COVID-19 has led to some unprecedented events around the world and uncertainty for our business and our people. We welcome the support packages so far announced by Governments and continue to focus on keeping our customers and employees safe and all of our stakeholders informed. By doing this, and by continuing to transform the way the business operates guided by our strategic priorities, we remain confident we can realise Ted’s exciting, long-term potential."


Ted Baker is Top250 retailer in RXUK Top500 research.

 

Retailers’ customer messages focus on delivery – and on working from home

Most retailers that have closed their shops are now focusing online, connecting with shoppers over a range of channels, from email to social media. Many are focusing on delivery as they look to find ways of getting the goods to their customers.

 

Sainsbury’s says it’s now prioritising its older and more vulnerable customers for home delivery, although the social media response suggests there are as yet delays in how this is working.

 

 

M&M Direct and Seasalt are among those focusing on delivery messages in customer emails that are tailored to the new work-at-home normal. M&M is offering next-day delivery "as normal" as it focuses on clothing more suited to the work at home lifestyle, while Seasalt is offering free deliveries to those who opt to "add a pop of colour to your everyday".

 

Staff at independent bookseller Topping & Company, of Edinburgh, have got on their bikes to deliver books to customers who live locally to its Edinburgh shop.

 

 

More high street shops now closing

More shops are drawing down their shutters, although the Government has not yet ordered the closure of non-essential shops. Those that do shut up are citing staff and customer safety, and many are directing their customers online instead. We’ve reported here on recent closures, including how John Lewis is handling customer engagement online, and what the effect has been on store-only Primark.

 

 

Image: Shutterstock

Linked InTwitterFacebookeCard
Add New Comment
You must be logged in to comment.

The InternetRetailing Newsletter

A curated update containing news analysis, reports, podcasts and opinion - completely free and delivered three times weekly

Become a Member

Create your own public-facing profile
Gain access to all Top500 research
Personalise your experience on IR.net
Internet Retailing
We are the magazine, portal and research source for European ecommerce and multichannel retail, hosting the board-level conversation for retailers, pureplays and brands across all of our platforms. Join the conversation.

© InternetRetailing Media

Latest Tweet

Internet Retailing
Tamebay
eDelivery
Twitter
Facebook
Linked In
Youtube
RSS
RSS
Youtube
Google
Linked In
Facebook
Twitter