talking trade Responding to the COVID-19 crisis
Retailers have been making changes that will have permanent effects on the way we shop, predicts industry commentator Michael Weedon
- and we already know how they have been doing. Household goods? Not good. But the nearby hardware market? Consistently poor. Carpets and other floor coverings had a really terrible time right up until the end of the year and the general election, at which point they started to have a period of very slender growth. Non-store retailers, including pureplay online
players, actually had a fairly poor last quarter (year-on-year), with a ‘wait-and-see’ October preceding a big Black Friday and so forth. It was clear by year-end that online sales
official figures. I would have said something like this: How UK retail is doing rather depends on
F
where you are viewing it from and how well your business is doing. In that sense, it’s a bit like General Relativity (but not much like it). Official figures from the ONS [Office for National Statistics] show that all retail sales rose, in cash terms, by 3.4% in 2019 over 2018. Even allowing for inflation at about half that rate, there was real growth in spending. Once again, and contrary to standard expectations, the percentage by which small business turnover increased exceeded that of the multiples: 4.1% against 3.2%. That said, as the 900ish multiples in the UK take three- quarters of all retail turnover, £9.5 billion of the added £13 billion ended up in their tills. Once again there was a sharp difference in
the fortunes of food and non-food retailers. Food retailers gulped down an extra helping totalling £4.2 billion in size, while non-food retailers had smaller servings at an extra £2.4 billion. Over 90% of that big wedge (possibly of cheese) was shared by just nine big grocers. Partially this has to do with the longstanding
difference in price inflation between the two sectors. Food price inflation has been positive and usually ahead of CPI [Consumer Price Index] inflation for the most part of a decade. Non-food price inflation has been negative for most of that period, with prices falling. Some might say that this has been a consequence of globalisation. So, about this “depends where you are
standing” thing: within all of those figures, we can see that big clothing retailers had a harder time than the non-food market as a whole and percentage-wise, they had it worse than small retailers. Department stores sit largely in this segment
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housewareslive.net •
HousewaresLive.net •
twitter.com/Housewaresnews March/April 2020
or this column, I originally planned to write about 2019 retail sales, now that the full picture has become clear in
growth had fallen below the 7% that would, if produced consistently, lead to the percentage of sales online doubling in a decade - suggesting that a multi-channel future was looking more likely than a winner-takes-all online retail landscape.
“Retailers are getting creative with their services”
Then, from the beginning of 2020, a number
of the statistics looked to have gone haywire. They weren’t, they just looked that way. The raw retail sales figures for January seemed to have jumped by more than a quarter year-on-year. That would have been some post-election bounce. It turned out to be just because the month’s totals included five weeks instead of four. Even the ‘seasonally adjusted’ figures were odd, but the average weekly figures showed growth of 2.2% - a little ahead of inflation. Then all the indicators really did go haywire.
On March 17, Hargreaves & Son of Buxton in Derbyshire (highly commended in the Best Independent Cookshop category of the Housewares Innovation Awards 2020) tweeted: ‘For our customers working from home or selfisolating, we are offering free delivery within a five mile radius for any phone orders.’ For online orders, a little guest soap is included with every parcel as a way of saying thank you.
Coronavirus outbreak As the Covid-19 crisis burst, and then intensified, we saw panic buying at supermarkets (but, oddly, not at convenience stores). Then we saw broad-brush enforced closures of ‘non-essential’ shops, as the government tightened restrictive measures. ‘Home and Hardware’ were included in the ‘essential’ shops category. In the first week of
On March 17, Hargreaves & Son of Buxton in Derbyshire (highly commended in the Best Independent Cookshop category the Housewares Innovation Awards 2020) tweeted: ‘For our customers working from home or self- isolating, we are offering free delivery within a five mile radius for any phone orders.’ For online orders, a little guest soap is included with every parcel as a way of say- ing thank you.
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