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Warnings of strong ecommerce demand this Christmas as customers shift online – threatening in-store jobs

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Online demand is set to be stronger than ever this Christmas, following the trend that has seen retail sales shift online and faster during the pandemic. The IMRG is asking shoppers who plan to buy Christmas presents online to do so early, amid warnings of “excessive” levels of ecommerce sales this year. And this morning Next chief executive Simon Wolfson said many in-store retail jobs could well become unviable at a time when Covid-19 lockdowns are accelerating a shift online that was already well underway before the pandemic.

Christmas demand

Andy Mulchay, strategy director at IMRG, told BBC Online: “We think the volumes are going to be really very excessive this year. Whilst that in itself is not a problem, getting too much of it too close to Christmas is going to be a bit of a problem. 

“If you can spread out your shopping and do quite a lot of it in November, maybe even a bit of it now, then that would really help.” 

IMRG says that online sales have grown by between 40% and 50% during the pandemic, and that could increase still further ahead of peak trading.

“At this point,” said Mulcahy, “I think we can expect an increase of at least 30% for the peak festive trading season but if stores have to close this might push to 50%.”

Shift online

Next’s Lord Wolfson told the BBC that thousands of traditional retail jobs were now “unviable” in the face of a permanent shift to online shopping. But he said that while the retailer had already reduced the number of people serving customers in store and that would continue over the next four to five years – in a way that reflected the falling in-store footfall – it had taken on staff in its call centres and in its distribution business as online demand rose. 

Wolfson also said that his business would probably not claim from the new Job Support Scheme  announced yesterday by Chancellor of the Exchequer Rishi Sunak, which is designed to help employers to support the wages of staff who return to work part time from furlough when that scheme ends at the end of October.

“In our particular case we don’t think we’ll need it and we won’t draw on it very much, because we think that by the end of October there’ll be enough work through the normal build up to Christmas to employ all the people that we’ve currently got on furlough,” said Wolfson. “We’ve got less than 10% of our staff on furlough at the moment. We don’t think we’ll need it but we think there are other sectors that desperately will.” 

Despite that, he does not believe that city centres are doomed. “I don’t think so, I think they’re going to have to change.” He added: “I think the idea of having places that lots of people can get to easily in order to meet, socialise and so on is always going to be powerful.”

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