Uniqlo owner Fast Retailing snaps up Superdry Regent Street store
The parent company of Uniqlo, Fast Retailing Group has signed a letting for the former Superdry store on Regent Street. The store is expected to sell a mixture of both Theory and Uniqlo clothing. The contemporary fashion brand Theory launched in New York in 1997 and at the end of February 2021, it holds 436 stores worldwide. The Japanese fashion retailer’s other brands, including US-based denim brand J Brand, could also be sold in the store, property sources told Drapers. The store is expected to open later this year although the exact date is not yet known. Last month Superdry closed the doors to its Regent Street flagship store, which first opened in 2011. The retailer is currently considering several locations in the capital, including Forever 21’s former flagship store on Oxford Street, which was forced to closed last year after the retailer filed for administration in the UK.
Morrisons customers raise £20m to support farmers
Morrisons customers have raised £20 million to support British farms and the countryside by choosing to pay a little more for products across the grocer’s For Farmers range. The Big 4 retailer said the funds raised have been “ploughed back” into a range of farm schemes to improve biodiversity and further improve animal welfare, in a period when British farmers faced financial uncertainty due to Brexit and the Covid-19 pandemic. In October 2015, Morrisons was the first British retailer to launch a dairy product where part of the purchase price went directly back to farmers. Milk For Farmers was the original product – at 10p-a-litre more than Morrisons’ own-label standard milk – with the full difference passed on to its dairy farmers. The range now includes Cheese For Farmers, Cream For Farmers and Eggs For Farmers which similarly give customers the opportunity to pay a little more to support farmers directly. Morrisons also said funds from the For Farmers range have helped the farmed and natural environment, citing its For Farmers ‘Chuckle Eggs’ range as an example. Costing an extra 1p per egg more, the retailer said this has enabled farmers to invest money in planting woodland and creating insect-friendly wildflower habitats for their free-range chickens to roam around in. To date 169 acres have been planted, Morrisons said, and this month a similar insect habitat scheme is being rolled out across all of the grocery giant’s milk farms. Meanwhile, money from the Milk for Farmers range has enabled more investment in animal husbandry from the 140 dairy farmers aligned to Morrisons. Farmers directly selling into the Morrisons Milk For Farmers range grazed their cows for an average of 224 days last year – over a hundred more days than are required. Unlike other supermarkets, Morrisons deals directly with the farmers who stock its shelves – around 3000 of them – rather than with wholesalers. “Our farmers continue to face some uncertainty due to the impact of Brexit and the pandemic,” Morrisons head of agriculture Sophie Throup said. “So we are pleased to have passed on £20 million from our For Farmers range to help fund initiatives which may otherwise have suffered from under-investment. “It’s great to see many customers want to pay more to support British farmers – and want to buy dairy products from cows that have been let out to graze and eggs from free range hens who can roam in enriched woodland and grassland areas.” Meanwhile, Morrisons has already embarked on a programme to be completely supplied by net zero carbon British farms by 2030, five years ahead of the market. Over the next nine years, the grocery is set to work with its 3000 farmers and growers to produce affordable net zero carbon meat, poultry, fruit and vegetables. Morrisons will also work with universities, farming and countryside organisations and carbon experts as part of the programme.
Click & Collect cash trial success likely to see it rolled out across UK
The UK’s first ‘click & collect cash’ trial is set to be rolled out to more locations across the country following “fantastic” feedback.
The trial, which was launched in Burslem and Tunstall in Stoke-on-Trent in March, allows customers to see which local shops have cash available and then pre-order it for pickup via an app, with no obligation to make a purchase.
Shoppers can also order cash to be delivered to their doorstep alongside groceries with a dedicated app.
It was launched by Swiss Fintech firm Sonect alongside UK cash management giant Loomis as part of a wider Community Cash Access Pilot scheme, and has reportedly proven popular with users in the area.
“The feedback on this new service has been fantastic so far,” Sonect’s UK director Ron Delnevosa said.
“Customers really appreciate the certainty of knowing where and when they can pick up their cash without the obligation to make a purchase. At the same time, our retail partners are benefitting from increased foot fall and more efficient use of the cash in their businesses. I am confident every community in the UK will soon be ready to welcome this innovation.”
According to data from the Access to Cash Review, 8 million people in the UK are at risk from the rapid demise of the “fragile cash system”.
The British Retail Consortium (BRC) recently revealed that nearly 10,000 free-to-use cash machines have been lost over the past two years, while only an estimated 10,000 remain.
While the majority of the country is comfortable with the shift to digital payments, these pilot schemes seek to protect those who still rely heavily on cash.
This group is largely made up of elderly and low income citizens who may not have access to bank accounts.
Tony Riaz, who runs Sonect retail partner One Stop added: “This is a really important scheme for the local community around our shop. There are many local people who rely on cash through choice or necessity.
Partnering with Sonect means we can help them get all the cash they need to shop and live their lives to the full. The Sonect app makes providing free access to cash easy. It is already making a significant difference and that will grow as more and more of our customers appreciate the benefits of using the Sonect service.”
British Land enjoys rent collection boost after shops exit lockdown
British Land has revealed a significant boost in rent collection from retailers since stores have reopened as lockdown restrictions eased. Bosses at the commercial property developer said 85 per cent of June’s £87 million rent bill has been collected, with 71 per cent of retailers paying up. It is split between £44 million from offices and £43 million from retail. This was 24 percentage points ahead of the same point in December and 17 percentage points ahead of the collections for the first three months of the year, when non-essential retailers and restaurants were closed amid the third nationwide lockdown. Rent collection from March is now at 91 per cent overall, with 85 per cent of retail rents collected. According to British Land, footfall was at 86 per cent of pre-pandemic levels in the seven weeks since the reopening of indoor hospitality on May 17, with sales at 94 per cent of pre-Covid heights. It added that retail parks were outperforming, with customers preferring to drive to shopping locations currently. Shopping centres were the poorest performers, with footfall at 74.8 per cent of pre-pandemic levels. As a result, the values of British Land’s retail parks rose 0.7 per cent in the second quarter of the year. The company recently expanded its footprint in the retail sub-sector with the £82 million purchase of Thurrock Shopping Park in Essex. “With lockdown restrictions lifting, we have seen a notable improvement in activity across our markets and our business is performing well,” British Land chief executive Simon Carter said. “On our retail parks, footfall and sales are close to pre pandemic levels, rents are stabilising with recent deals… and there are indications that retail park values are starting to rise as more investors target the market.” He also revealed the company has seen a surge in demand for flexible office space, as businesses look to introduce hybrid working.
Co-op opens 3rd On The Go store with first-ever coffee counter
The Co-op has opened a new-look convenience store in central London that showcases the retailer’s first-ever coffee counter. The new 2168sq ft store on Baker street is the Co-op’s third On The Go convenience concept store, and follows a £2.1 million investment to support up to 50 jobs in the local community. The store also features the Co-op’s own Ever Ground Coffee counter, with the addition of two Ever Ground coffee machines. The Co-op said its Ever Ground brand is 100 per cent Fairtrade and the counter will additionally sell a range of hot food and in-store bakery items. “We’re really looking forward to bringing the new concept store and coffee counter to Baker Street,” Co-op coffee buyer Jenna Thomas said. “With its fantastic location within the station, we will offer ease, speed, quality and convenience for commuting consumers in the city. “Fairtrade is central to our core business values and we are delighted to support the scheme in this new concept with our new, full-bodied, great tasting freshly ground coffee, that’s grounded in good.” The retailer said “a greater understanding” of its customers is what resulted in the creation of a grab-and-go proposition. The Baker Street new store will also have a free water refill station, an orange juice machine, frozen drinks and a milkshake machine. Other treats available include hot food, impulse bakery products, sushi and donuts, as well as sandwich, salads, pasta, snacking, ready meals, wines, chilled drinks and everyday essentials which completes the Co-op’s grab-and-go mission.
TikTok to launch its first physical retail destination in London this month
TikTok is launching its first ever physical retail destination in partnership with Westfield London aiming to bring the “experience of video and retail” to a real-life format.
TikTok’s 4000sq ft ‘For You’ house will launch over two floors in the shopping centre from July 22 to August 8.
The social media giants new activation will bring the UK’s biggest TikTok influencers, with a combined following of over 100 million followers, together in a real-life interactive space.
It will host bookable creator workshops from Thursday to Sunday with talent from all of TikTok’s leading categories, including Kyle Thomas, Ehiz Ufuah, Poppy O’Toole, Jeremy Lynch and Ben Black, designed to help guests learn, create and share their own content.
From Monday to Wednesday the house will be open for all customers to books slots in each of the four themed rooms to film creative content through interactive video booth experiences.
The For You house will feature a central living room which will focus on video editing, a dressing room focusing on beauty, fashion and transformation challenges, a garden focusing on sports and dance routines and a kitchen to showcase viral recipes and cookoffs.
“Creators are at the very heart of the TikTok experience, and to be able to celebrate them once again in real life with this incredible activation at Westfield London is a unique chance for our community to see the For You feed brought to life,” TikTok’s Holly Harrison said.
“The experience of video and retail are becoming increasingly intertwined and to be able to bring TikTok to life together with Westfield London was a challenge that our team relished.”
Unibail-Rodamco-Westfield’s marking director Harita Shah added: “TikTok has become a cultural phenomenon. It’s where many of our visitors are getting their inspiration from, whether that’s fashion trends, the newest home styling influencer or foodie fads.
“Having a physical space at Westfield London gives TikTok the chance to immerse shoppers and new creators in full 360 experience where the best of the online platform merges with a real life experience. The TikTok House will bring together community and creativity, which is at the heart of what both brands do, and we have no doubt the space will be a huge success this summer.”
Asos launches Nordstrom joint venture to sell Topshop clothes in US stores
Asos has partnered up with US retail giant Nordstrom in a new joint venture that will see Topshop clothes sold in physical stores again for the first time since late last year. The deal sees Nordstrom – which first struck a deal with the former Arcadia flagship brand nine years ago – buy a minority stake in the Topshop, Topman, Miss Selfridge and HIIT brands that were bought out of administration by Asos earlier this year. Asos said: “The joint-venture will help drive the growth of these brands and paves the way for exploration of a new wider strategic partnership aimed at building greater awareness and engagement in the US and Canadian market.” It is the first time Asos has struck a deal with a retailer with physical stores, having always only traded online in the past. Nordstrom has 350 bricks-and-mortar stores in North America and a strong online business, which Asos hopes to tap into despite having a strong ecommerce presence of its own in the region. Asos will retain operational and creative control of Topshop, Topman, Miss Selfridge and HIIT but will collaborate on reaching a larger customer base. This includes “an edit of the best Asos brands launching across Nordstrom.com and in selected high-impact Nordstrom stores”. Asos will also offer click-and-collect services in Nordstrom stores. The move comes five months after Asos bought Topshop, Topman, Miss Selfridge and HIIT from administrators for Sir Philip Green’s now-collapsed Arcadia Group retail empire for £330 million. However, while Asos bought the brands, it decided not to take on the 70 stores, including the flagship site at London’s Oxford Circus, a move that affected around 2500 workers. “With its long-established connection to Topshop, extensive US consumer insight and unparalleled reach right across North America, Nordstrom is the right partner to help Asos accelerate the growth of our Topshop and Asos brands in this key market,” Asos chief executive Nick Beighton said. Nordstrom president and chief brand officer Pete Nordstrom said: “We could not have found a better partner in Asos, the world leader in fashion for the 20-something customer.” Topshop and Nordstrom first teamed up in 2012, with the former selling a range of clothes in the latter’s US stores. It was part of the former UK fashion giant’s first foray into the US and eventually led to several Topshop stores in US cities.
Amazon goes down across the globe in 2nd major outage in as many months
Amazon has experienced its second major outage in as many months seeing its shopping service go down across the globe for a number of hours.
More than 38,000 users reported issues with Amazon’s online store across Sunday evening in the US and Monday morning for many other regions, according to data from Downdetector.
It is understood that the site was down for around two hours across the US, UK, India, Canada, France and Singapore, with around 80 per cent of users reporting issues stating it was with Amazon’s website.
The ecommerce giant says it has now returned to normal services, stating that “some customers may have temporarily experienced issues while shopping,” adding that it had now “resolved the issue, and everything is now running smoothly”.
The outage was so widespread that #Amazondown began trending on Twitter, with the Amazon Help account responding to concerned users apologising “for the hassle” and assuring their teams would “get it back to normal soon”.
It comes just weeks after a separate outage at Amazon, which brought down its Alexa and Prime Video services for large portions of its network.
It is not yet clear whether this was an internal error or the result of third-party malicious actors, with Amazon refusing to give comment.
Last week hackers belonging to REvil, a Russian-speaking cybercrime unit, launched a sophisticated ransomware attack on IT giant Kaseya, whose technology by around 200 business and across millions of machines.
Sweden’s Coop, one of the country’s largest grocers with over 800 stores, was severely impacted by the attack being forced to close huge portions of its estate while its checkout tills were made unusable.
This represented one of the largest and most advanced cyberattacks to date, and exposed the vulnerability of retailers to bad-actors seeking to cause as much disruption as possible
Ocado still can't serve a lot of M&S customers according to chairman Archie Norman
Ocado is still plagued by capacity issues and “can’t serve a lot of Marks & Spencer customers” according to its chairman Archie Norman.
The online grocer is still struggling to match demand from customers almost a year after it launched its joint venture with M&S, Ocado Retail, marking the first time every its food has been available to buy online.
According to The Telegraph, M&S’ own chairman Norman admitted that Ocado “doesn’t cover a lot of the country” and needed lots of investment to expand its operations and match demand.
Speaking to investors at M&S’ annual general meeting, Norman said: “Working in a joint venture, you have to put a bit more work into it to make sure you’re aligned.
“We have to position our business right for (online), and make sure that Ocado has the right growth in place.”
On the first day Ocado Retail launched in September last year, seeing the online grocer replace hundreds of Waitrose goods with M&S items, it was forced to cancel orders just hours before they were due to be delivered.
While it apologised to customers and said it was due to an unexpected “surge in demand”, it represented the latest in a string of capacity issues that have dogged Ocado since the start of the pandemic.
In July 2020, Norman warned customers that the lockdown spike in demand meant Ocado was continuing to operate “at capacity” and therefore was not able to serve many new customers when the joint venture launched.
To tackle this issue Ocado has now pledged to increase capacity by 40 per cent by the end of 2021 through “significant” investment next year.
Ocado’s model relies on highly automated warehouses which pick online orders automatically.
While its technology has until now been its unique selling point, the expensive and complex sites are now preventing Ocado from being able to meet its customers’ needs, seeing many of them turn to the increasing number of rapid delivery alternatives.
Boohoo ink new partnership to run Debenhams in the Middle East
Boohoo has announced a new partnership with Middle Eastern industry giant Alshaya as it seeks to build on the presence of Debenhams across the region. In a statement this morning, Boohoo said the partnership marks a further step as it “accelerates progress integrating and scaling” the Debenhams brand. Kuwait-based Alshaya, which currently runs Debenhams stores in leading shopping malls in the region, will now have exclusive rights to operate the Debenhams stores and a local ecommerce platform in Kuwait, Saudi Arabia, UAE, Bahrain, Egypt, Oman and Qatar. The Debenhams stores across the Middle East were not affected by the department store’s administration and subsequent liquidation process in the UK last year. The Debenhams brand, ecommerce operations and assets were purchased by Boohoo Group in a £55 million deal in January. This deal did not include Debenham’s physical store estate in the UK, and Debenhams the last of its 118 stores in mid-May, marking the final nail in the coffin in its 243 years of trading as a bricks-and-mortar retailer. In the wake of the Alshaya partnership, Boohoo said it would continue to work with new strategic wholesale partners in “key regions” to extend reach and build brand awareness. It added that the new partnership will see Boohoo Group brands being sold in Debenhams stores from the fourth quarter this year, and also on a new local online platform across the Middle East from early 2022. “I am delighted to be working with Alshaya to operate Debenhams in the Middle East,” Boohoo Group chief executive John Lyttle said. “The Debenhams brand has been popular in the region for a number of years so this is a great opportunity to build on the existing brand awareness, while expanding the product ranges and brands available to customers. “It also offers a new route to market for brands within the boohoo group, raising their profile in a growing new market. “This is a great step as we progress the integration of Debenhams and look at wholesale partnership opportunities to continue to scale the group.” Alshaya Group chief executive John Hadden said: “Debenhams is a highly successful and well-loved brand in the Middle East, thanks to sustained store and product innovation over 25 years across fashion, beauty and home. “Today we are delighted to step-change that innovation through our new partnership with boohoo group, one of the UK’s leading digital retailers. “In a new chapter for Debenhams, we look forward to enhancing customer choice by bringing exciting new fashion brands to the region and by expanding the Debenhams brand online. “Alshaya already has the region’s largest digital footprint but I know the team are looking forward to learning from such acknowledged global ecommerce experts.”
BRC warns of High Street labour shortages
The BRC has warned of high street labour shortages as 20 per cent of shop workers across the UK in the retail and hospitality sectors enter isolation due to Covid19. Both sectors say that one in five workers have now been called to isolate, exacerbating the issue of labour shortages due to Brexit and other factors. BRC chief executive Helen Dickinson told MPs on the Business, Energy and Industrial Strategy Committee: “We are seeing some vacancy rates of around 20 per cent, and only some of that is directly people with Covid – a lot is the indirect consequence of having to isolate, irrespective of tests or whether one has had two vaccines. “I think it is an immediate issue that comes with the lifting of restrictions.” The Co-op also confirmed it was seeing an increase in absenteeism due to self-isolation, mostly in its logistics and depot areas, leading to issues with certain products. The government has said it may look to reduce the sensitivity of its Test and Trace app as restrictions lift next week, for fear that too many people will be called to isolate. Figures show that the number of contact alerts issued by the app has risen dramatically since hospitality and leisure businesses began the process of reopening in April, with over 200,000 alerts sent during a single week in June. The changes next week mean that the double-vaccinated will not have to self-isolate after coming into contact with someone with coronavirus, but this will negatively affect businesses with a younger workforce who have not received one or both of their vaccinations.
Apple is launching its own BNPL service for all Apple Pay purchases
Apple is planning to launch its own ‘buy now, pay later’ service allowing users to pay for any Apple Pay purchase in a number of instalments.
‘Apple Pay Later’ will reportedly use Goldman Sachs as the loan provider, having has worked with the banking giant since 2019 to provide its Apple Card credit card, Bloomberg reported.
It is understood that Apple Pay Later functionality will be added to the Apple Pay ecosystem in the near future, offering anyone using the service the option to pay for their purchase in four interest-free payments made every two weeks, or across several months while paying interest.
According to unnamed sources close to the matter the service will be available both instore and online, while customers will be able to use any credit card to repay month instalments.
The scope of potential adoption is massive, with around 85 per cent of US retailers currently accepting Apple Pay, which is available on all iPhone devices, owned by around 50 per cent of UK smartphone users.
Shares in rival BNPL companies like Afterpay and Zip, some of the biggest providers in the US, fell by nearly 10 per cent on news of the tech giant’s imminent entry into the sector.
Unlike BNPL incumbents such as Afterpay and UK market leader Klarna, Apple Pay Later will not require running a credit check on users, a key point of controversy for the emerging fintech sector.
Instead Apple Pay Layer will require users to be previously approved via an application submitted through the iPhone Wallet app, in which they’ll need to submit a copy of their ID card.
It will also offer users the ability to exit payment plans by paying off the remaining balance, while some plans will exclude late fees and processing fees.
According to Statista, Apple Pay is projected to see global revenues of $4 billion this year, up significantly from $988 million it made in 2019.
Hugo Boss to see 2021 revenue growth of 30-35%
Hugo Boss expects to see its revenue grow by 30 per cent to 35 per cent this year as customers return to shops with the lifting of coronavirus restrictions. On a preliminary basis, currency-adjusted group sales climbed by 133 per cent in the second quarter of 2020, more than doubling to £536 million. In the same time period in 2020, sales were £234.37 million. “Despite the persisting uncertainties regarding the further development of the pandemic, Hugo Boss is confident that the company’s overall business recovery will continue in the second half of 2021”, the retailer said. Second-quarter earnings exceeded overall market expectations, Hugo Boss said, adding that on a preliminary basis, sales increased 129 per cent to £535 million, while EBIT stood at £35 million, compared to a loss of £212 million in the year-earlier period. The company will publish its full second quarter results on 4 August.
Dunelm profits to be ahead of forecasts after quarterly sales jump 44%
Dunelm has hailed a “strong” jump in sales for the past three months on the back of pent-up demand from shoppers returning to stores. The furniture retailer reported £380.1 million in revenues for the three months to June 26, representing a 43.9 per cent rise against the same period in 2019, before the Covid-19 pandemic struck. It said it was buoyed by the reopening of its stores since April 12, while digital sales continued to post significant growth. Dunelm said its profits for the past year were on track to be “slightly ahead” of analyst predictions as a result of the positive trading update. Bedding, curtains, bathroom textiles and cushions all saw positive sales over the quarter as shoppers continued to spruce up their homes. The retailer said it has seen stocks return to normalised levels after the surge in demand but has continued to “experience disruption” in its global supply chain due to the pandemic. “Although our stores were closed for more than a third of the year, our strategy of investing in our digital capabilities allowed us to adapt to the changing environment and deliver strong growth,” Dunelm chief executive Nick Wilkinson said. “From what we have learned during the pandemic about our customers, colleagues, suppliers and our other stakeholders, we are more confident than ever about the opportunity to increase our market leadership and we will invest further in our proposition to support our growth ambitions. “With many exciting developments in the pipeline to make us the first choice for home, and grow our customer base and frequency, there is a lot to look forward to.”
Food price rises drive UK inflation to highest point in 3 years
The UK’s rate of inflation soared to its highest point for almost three years in June on the back of increases in the prices of food and fuel. The ONS said the Consumer Prices Index (CPI) rose to 2.5 per cent from a figure of 2.1 per cent the previous month, moving further away from the Bank of England’s two per cent target. The official figure again overshot the expectations of analysts, who had predicted that it would rise to 2.2 per cent for the month. It is also the highest inflation rate since the UK saw a 2.7 per cent rise in August 2018. The Bank of England has warned that inflation could hit three per cent by the end of the year. “Inflation rose for the fourth consecutive month to its highest rate for almost three years,” ONS deputy national statistician for economic statistic Jonathan Athow said. “The rise was widespread – for example, coming from price increases for food and for second-hand cars where there are reports of increased demand. “Some of the increase is from temporary effects – for example, rising fuel prices, which continue to increase inflation, but much of this is due to prices recovering from lows earlier in the pandemic. “An increase in prices for clothing and footwear, compared with the normal seasonal pattern of summer sales, also added to the upward pressure this month.” The ONS said food and non-alcoholic drinks contributed to the lift in inflation, after a 0.2 per cent price rise for the month compared with significant deflation for the same period last year. Within food, the largest shift was caused by bread and cereal prices, where prices of items such as packs of individual cakes and crumpets rose this year but fell a year ago. Meanwhile, the price of petrol increased by 2.5p between May and June, rising to its highest price since October 2018. Elsewhere, a rise in second-hand car prices also contributed to inflation, with reports that prices were buoyed by higher demand at the end of the latest lockdown. The Retail Price Index (RPI), a separate measure of inflation, increased to 3.9 per cent – the highest since January 2018. The CPI, including owner-occupiers’ housing costs (CPIH) – the ONS’s preferred measure of inflation – was 2.4 per cent for the month, compared with 2.1 per cent in May.
Lidl pledges to increase sales of healthier food
Lidl has announced a new health pledge that will see it increase sales of healthy and healthier products to at least 85 per cent of total sales over the next four years. The British arm of the German discount grocer said its new Healthy Eating Pledge would be based on tonnage volume, and that the target will be achieved by 2025. Lidl said its specialist nutrition teams have developed a bespoke nutrient profiling system (NPS) based on Public Health England’s nutrient criteria for front-of-pack traffic light labelling, focusing on fat, saturated fat, sugar and salt. The retailer said the NPS would then allow it to rank all products as healthy, healthier or least healthy. As part of the commitment, Lidl’s teams will assess over 200 lines each year that can be improved to meet the healthy or healthier criteria. Lidl said it would also engage with suppliers to ensure it boosts its portfolio of healthier products. The move comes after the discounter invested in its Get Fresh initiative, which aims to increase the range of fresh healthy products, like fresh meat, fruit and vegetables available to customers in-store to offer even more healthy choices. Lidl added that its stores continue to be upgraded with larger, energy-efficient chillers which can stock more than 100 new and exciting products on shelves. It said it would prioritise placing fresh, healthy products at the heart of customer’s store journey, with new products located prominently at the front of store. The programme is set to be complete by September. “Our Healthy Eating Pledge is our most ambitious healthy eating target yet and is focused on helping families make healthier choices when they shop with us, without compromising on price,” Lidl GB chief executive Christian Härtnagel said. The latest commitments are in addition to steps Lidl has previously taken to promote healthy eating among children and reduce pester power, including the removal of cartoon characters from its own-brand cereal ranges. In addition, in 2014 Lidl became the first supermarket in Britain to remove sweets and chocolates from checkouts nationwide. Lidl was also one of the founder signatories to the Food Foundation’s Peas Please pledge in 2017 and committed to running more discounts on vegetables to make greens more affordable for more families. This year, Lidl strengthened its existing pledges by setting an additional target to increase the sale of fresh fruit and veg by 35 per cent by 2026 and will report actual sales annually.
Asos sales up 31% but bosses warn of covid uncertainty
Asos has voiced caution over how the rest of the Covid-19 pandemic will play out as it said it expects volatility in the months ahead. The online fashion retailer also highlighted that profits are being squeezed in part due to increased freight costs and global supply chain disruption. However, bosses remain optimistic for the future, highlighting the ever-growing demand for online clothes and a boom in sales during the four months to June 30 – despite high streets reopening as lockdown restrictions eased. Customers have also taken advantage of the recent lockdown easing, with more dresses and “occasion wear” rising in popularity. “Trading in the last three weeks of the period was more muted, as continued Covid uncertainty and inclement weather, particularly in the UK, impacted market demand,” the online retail giant said in an update to the stock market. “We anticipate a measure of volatility to continue in the near term, given the rapidly evolving Covid situation worldwide.” It added that there was a “strong performance in the UK, with increased promotional activity to capture the available demand for our compelling product offer, despite the reopening of physical stores early in the period”. “The final weeks of June saw a softening, due to the impact on consumer demand of continuing Covid uncertainty and unseasonal weather,” Asos said. Sales in the four months to June 30 jumped 31 per cent to £1.29 billion, driven by a 60 per cent rise in UK sales to £526.4 million – the strongest growth of any of its markets. The US saw growth of 31 per cent to £144.8 million – although this was helped by currency fluctuations in Asos’s favour – while the EU was slower with 20 per cent growth to £388.3 million. “Asos has delivered another strong performance against a backdrop of continued social restrictions and global supply chain pressures,” chief executive Nick Beighton said. “Although mindful of the continued impacts of the pandemic on our customers in the short term, we believe that the structure of the global ecommerce fashion market has changed forever, which will drive an increase in online fashion sales over the long term.”
Halfords seeks 700 technicians & store workers in recruitment drive
Halfords has launched a recruitment drive to hire more than 700 people across the UK after a strong year in both the motoring services and cycling parts of its business. The retailer, which has 404 stores and 374 garages, has roles available for vehicle technicians, MOT testers, cycle technicians, auto technicians, store and autocentre staff, department supervisors and management. Halfords said it invests heavily in training to give its staff, running four purpose-built training academies in Basingstoke, Northampton, Bolton and Halifax. It said it spent £1m on technician training in the last year alone. Halfords also partners with the Institute of Motor Industry (IMI) and DVSA to develop qualifications and training and is one of the few employers to offer every technician a pathway to becoming an MOT tester and hybrid trained technician. The retailer added that it also offers competitive pay, performance related bonuses and incentives, pension contributions colleague discounts and a range of other benefits. Halfords also has a history of offering roles to service men and women when they leave the forces. “Our strategy of focusing on services is paying dividends as more and more people turn to us for fitting and repairs,” Halfords group head of resourcing Andy McBride said. “At the same time, the acceleration in the adoption of electric vehicles is creating new opportunities in our garages. “The UK faces a skills gap in electric technicians. As a nation we need to be training technicians at twice the current rate. “We’re determined to ensure we stay ahead of the game and play our part in helping people transition to electric forms of transport.”
Poundland quarterly like-for-like skyrockets 21%
Poundland has enjoyed a boost in quarterly sales thanks to the easing of lockdown restrictions coupled with the ongoing expansion of its categories on offer. Poundland revenue for the third quarter ending June 30 came in at €481 million (£411.5 million), which marked 33.8 per cent growth in reported currency terms or 30.3 per cent in constant currency when compared to the same quarter last year. The performance was boosted by a 21.1 per cent surge in reported like-for-like growth and the opening of 22 new stores during the quarter. For the year-to-date, Poundland recorded €1.45 billion (£1.24 billion) in revenues, a growth of 8.8 per cent and 10.6 per cent in reported and constant currency respectively, while year-to-date like for likes grew 5.2 per cent. As an essential retailer, Poundland has been able to trade throughout the Covid pandemic, albeit experiencing significantly reduced footfall in periods of the most significant restrictions. Parent company Pepco Group highlighted that the third quarter of the previous financial year was the most impacted, with peak store closures of 142 Poundland stores in April 2020. As a result, it said Poundland’s strong current year like-for-like performance of 21.1 per cent should be considered in this context with the year-to-date trading store like-for-likes of 5.2 per cent. Pepco Group said this was “a clear indication of the strengthened customer offer”. Poundland’s revenue growth also reflected strong performances across recently extended categories in clothing and homewares and the introduction of a new frozen and chilled offer to 42 stores in the quarter, and 91 year-to-date. The extension of product ranges to price points above and below the £1 anchor price point also continued with multi-price participation across all FMCG and general merchandise categories leading to an increase of 23 per cent of revenue. Meanwhile, Pepco Group – which also operates the Dealz and Pepco retail chains across mainland Europe – reported overall third quarter sales of €1.04 billion for the third quarter. This marked a 46.7 per cent year-on-year surge in reported currency, or 45.5 per cent growth in a constant currency basis. On a like-for-like basis, this represented a 29.3 per cent increase on a reported basis. For the year-to-date, Pepco Group sales came in a €3.04 billion (£2.6 billion), while like-for-like growth stood at 9.6 per cent. The quarter also saw Pepco Group open 117 new stores, the vast majority of which were under the Pepco fascia, in all of its 14 current markets – including opening its first stores in Spain, its second Western European market. “We made good strategic progress in the third quarter, with all three of our brands delivering a resilient trading performance as consumers continued to come back to Pepco, Poundland and Dealz, following the gradual easing of Covid restrictions,” Pepco Group chief executive Andy Bond said. “While the consumer backdrop is likely to remain volatile and challenging for some time, we remain confident in the strength of our customer proposition and the long-term growth potential for our business.”
Hammerson warns no more rent holidays for retail tenants
Hammerson has warned its tenants that it will no longer offer rent concessions to hard-hit retailers and businesses. The shopping centre giant, which owns Birmingham Bullring, London’s Brent Cross and several other sites, said “all avenues to collect rents due are being pursued”. During the Covid-19 pandemic, Hammerson said £26 million in rents were waived, written off or still not yet due for 2020, with £15 million in the same situation so far this year. Hammerson’s announcement came as bosses revealed that the company has still only managed to collect 62 per cent of the £154 million rents due so far this year and 89 per cent of the £264 million due in 2020. Around 68 per cent of rent due for the first half of the current year and 47 per cent of initial rent for the third quarter has arrived – up from the same point a year ago, Hammerson added. Bosses said the easing of some Covid restrictions since the company’s last trading update on April 20 has seen an increase in customers heading to its shopping centres, but restaurants, cinemas and other leisure activities continue to suffer. Footfall numbers are between 70 per cent and 80 per cent of 2019 levels, although this fell from an initial spike immediately after non-essential retailers and leisure services reopened in April and May. Independently recorded footfall figures and retail sales data across the sector have shown that people are preferring to head to retail parks, with shopping centres failing to win over as many customers with restrictions eased. “Many retailers continue to report high sales and conversion rates as visitors shop with purpose,” Hammerson said. “These trends have been particularly positive in France during the first few days of the summer sales period.” Bosses also pointed out that additional Covid restrictions have been announced in France, where it has a large portfolio of shopping centres, but added: “It is too early to assess the operational impact.”
Hobbycraft sees double-digit sales growth
Hobbycraft has announced that its sales have grown 15 per cent versus pre-pandemic levels following store reopenings in April. The retailer also stated that it had managed to maintain the strong ecommerce growth rates it generated during in lockdown which helped to mitigate store closures. From the period from April 12 to June 27, since stores reopened, total like-for-like sales growth of 15.3 per cent on a two-year basis. Ecommerce sales have continued to be strong, with trading at almost double the level of two years ago. Its wedding category has also proved successful following the easing of restrictions for weddings, with sales up 26.8 per cent since reopening. For the fiscal year 2022, the retailer plans to further its digital investment to enhance online customer experience and proposition, this will include a new customer website and the launch of a new platform for which will house online workshops where customers can discover new crafts and master techniques from Hobbycraft colleagues. There will also be the development of experiential offering in stores through demos and workshops hosted by inhouse Artisans. The arts and crafts retailer is aiming to increase Artisan colleagues from 31 to 100 by the end of the fiscal year 2022. The retailer also plans to add to its estate of 102 stores by opening seven new stores across the UK and Northern Ireland, including Leicester, Belfast and Exeter, creating new retail jobs. “I am delighted to report that since our stores reopened in April 2021 we have delivered double-digit like-for-like sales growth compared to pre-pandemic levels two years ago,” Hobbycraft chief executive Dominic Jordan said. “This performance underlines the strength and breadth of our offer as we trade positively in stores and sustain the strong E-commerce growth we generated in lockdown. “As the UK’s largest arts and craft retailer, we look forward to continuing our growth plans in FY22 by further enhancing our product range and online proposition, opening new stores and hiring new retail colleagues whilst we capture market share in the UK’s rapidly growing craft sector. “Looking back at our FY21 performance, I am pleased to report a robust set of results following what was one of the most challenging years the retail industry has ever known. “We were delighted to welcome over 1.3 million new customers, many of whom are millennials, who rediscovered old hobbies or created new ones during lockdown. “Our performance is testament to our incredible colleagues and the truly cohesive multichannel model we have built over recent years, which ensures we satisfy the needs of craft enthusiasts however they wish to shop with us.”
Tesco, Sainsburys, John Lewis, Waitrose, Asda, Aldi & Waterstones encourage face masks after July 19
Tesco, John Lewis, Waitrose, Asda and Aldi have become the latest retailers to say they will encourage customers and shop workers to continue wearing masks in stores from July 19. The news comes after Sainsbury’s and Waterstones yesterday said they would encourage all customers to wear a face covering in their stores if they can after “Freedom Day” comes into effect in England on Monday. Earlier this week, the government published guidance for retailers which said it “expects and recommends” masks to be worn by workers and customers in crowded, enclosed spaces as the work from home order ends. Tesco has said it would leave a raft of virus curbs, such as distancing measures, in place across its shops. Last week, the supermarket started an internal review regarding its mask-wearing policies ahead of the latest easing of restrictions. The Big 4 giant also said it would continue to have capacity limits in its stores, protective screens at checkouts, hand sanitiser stations and regular cleaning after speaking with customers and colleagues. “Since the start of the pandemic, we have focused on ensuring everyone can get the food they need in a safe environment,” a Tesco spokesperson said. “Having listened to our customers and colleagues, we will continue to have safety measures in place in our stores; these include limiting the number of people in store at any time, protective screens at every checkout, hand sanitiser stations and regular cleaning. “We’re asking our customers and colleagues to be on the safe side, and so from July 19 we’ll be encouraging our colleagues to wear face coverings whilst they work and encouraging our customers to do the same when they shop with us.” Asda will have signage and announcements to encourage customers to follow Government guidance and will continue to provide face coverings in shops for people who wish to use them. A spokesman said: “We encourage customers to be respectful to each other and to follow the Government guidance on face coverings when shopping in our stores after 19 July.” Staff and customers at Waitrose and John Lewis have also been recommended to continue wearing masks but said it would ultimately be up to individual judgment. A spokesman for the John Lewis Partnership, the parent company of both brands, said: “In line with government guidance, we will recommend that our customers and partners in England continue to wear a face covering, unless exempt, from July 19. “The decision over whether to do so or not, when in our shops, will be for each individual to take, based on their own judgment. “Across all of our stores we will be retaining perspex screens and hand sanitising stations. “We will also maintain all of the hand hygiene and store cleaning disciplines which have served us well since the start of the pandemic.” The retail group added that it will continue to follow legislation in Scotland and Wales which requires customers and employees to wear masks, unless exempt. Aldi also confirmed its position on masks in its stores in the wake of the guidance from the government. An Aldi spokesperson said: “From Monday July 19, we’ll continue to encourage customers and colleagues to wear face coverings when they’re in store. Other measures like hand sanitiser and screens will also stay in place. “Face masks are still required for customers and colleagues in our Welsh and Scottish stores, in line with the latest guidance.” Waterstones was one of the first major retailers to state a firm policy on mask wearing. In a tweet, the books retailer said: “Following the lift of restrictions on 19 July across England, we will observe new government guidance. “Given our enclosed browsing environment, we encourage our customers to wear face masks and observe social distancing, respecting the safety of staff and fellow book lovers.” As with other retailers, Waterstones also confirmed that other safety precautions – such as staff wearing masks and safety screens – will remain in place. However, managing director James Daunt told BBC News that while the face covering policy will be communicated by signs, staff would not enforce it. Meanwhile, Sainsbury’s said that while wearing a face covering would ultimately be down to personal choice rather than an obligation, its guidance reflected the views of customers and it was asking “everyone to be considerate”. Sainsbury’s added that new signs and tannoy messages “will encourage customers to continue to wear a face covering, if they can”. Staff will also encouraged to do one, unless they are behind a screen. Similar to rival Tesco, Sainsbury’s said hand sanitiser stations would also remain in place and it would also continue cleaning trollies and baskets, as well as overnight deep cleaning. “Our colleagues’ safety is vital and many of our colleagues would feel more comfortable if those who can wear face coverings continue to wear them,” Sainsbury’s chief executive Simon Roberts said. “We’ve listened closely to our customers too and they are telling us the same. “We’re asking everyone to be considerate and, while we understand wearing a face covering will now be a personal choice, we want to ensure we best support and protect each other in the weeks and months ahead.”
Primark stores among venues hosting weekend pop-up vaccination clinics
Shoppers will be able to pick up a jab alongside a new wardrobe this weekend when Primark stores become pop-up Covid-19 vaccination clinics. NHS England has announced that shoppers in Broadmead Shopping Centre in Bristol and at the Trinity Leeds will be able to pop into the clothing stores for their first dose. Officials are seeking to maximise protection before restrictions are lifted on Monday with a series of pop-up clinics for those who have not taken up the offer of a vaccine. They are also the latest sites to be added in the Grab A Jab scheme the NHS has been running the past few weekends, in which grocery car parks and shopping centres around the UK have become pop-up vaccination clinics. People aged 18 and over can simply turn up at the NHS pop-up vaccinations sites with no need for an appointment. Sunseekers looking to enjoy the warm conditions this weekend will also be able to grab a jab at commons across south-west London, Greenwich Park in London and Liverpool’s Sefton Park. Meanwhile, members of the public will be able to enjoy a DJ spinning tunes while waiting for their vaccine at the Tate Modern art gallery on London’s Bankside on Friday evening. The British Open golfing championship in Sandwich, Kent, will also join the push, with a GP-led clinic dubbed the “vaccine caddies” offering a dose to eligible golfers, caddies, staff and the 30,000 spectators expected daily. NHS staff and volunteers will be in attendance at the Oval cricket ground this weekend where the public can also grab a jab. “You can pop into Primark, enjoy the sun in the park, and explore the art at the Tate, while also protecting yourself and your loved ones by getting a vaccine this weekend,” NHS medical director for primary care Dr Nikki Kanani sai. “From high street shops to mosques and sports grounds, our incredible staff together with our wonderful volunteers are doing all they can to make sure it is easier than ever for people, particularly young adults, to get protected.”
Grimsey Review calls for write off of £1.7bn Covid loan debt for indie retailers
Independent retailers face a “mountain of debt” after taking on Covid support loans during the pandemic and now need government help to survive, according to an influential independent review. According to the latest Grimsey Report titled Against the Odds, conducted by former Wickes and Iceland boss Bill Grimsey, small and/or independent retailers now owe four times as much as they did one year ago. The report also states pre-pandemic borrowing for independent retailers was £483 million, with extra borrowing through Bounce Back Loans estimated to be £1.7 billion. The debt mountain had soared because small shops coped with the Covid-19 pandemic by taking on government-backed loans that would not normally have been granted, based on their finances. Grimsey’s review calls for the government to write off some debt, and warned that without help the UK would a fresh wave of store closures and job losses this autumn. “Our high street independents have experienced a new-found appreciation during lockdown,” Grimsey said. “But they’ve also been forced to take on government-backed loans, which they would not have normally been able to get because their balance sheets wouldn’t allow it. “Now they are struggling to manage a mountain of debt and need help.” He added: “Britain is at a crossroads and the pandemic has brought about sweeping changes that will make a decisive break with a traditional high street model. “But we can’t build our way out of trouble. To unlock the potential of our high streets, we need to focus on people, partnerships and communities as well. “That means protecting small businesses. It means supporting a new breed of digitally savvy entrepreneurs and making high streets a testbed for new thinking. “And it means promoting high standards and regulating key sectors such as hair and beauty. “Britain needs a social recovery to lock in an economic one and our high streets should lead by example.” The Treasury has said it was already providing further support and flexibility in loan repayment. The latest Grimsey Report reviewed the published accounts of every UK independent business across the retail, services and hospitality sectors with total assets of £250,000 or less. Last year, Grimsey said nearly half of retailers were in danger of “going bust” even before the pandemic, but a boom in online shopping had hastened the process, adding the “old high street is finished”.
Asos latest to warn of severe staff shortages due to NHS track-and-trace chaos
Retailers have warned of severe staff shortages after more than half a million people were ‘pinged’ by the NHS app and forced to self-isolate in a single week.
Asos became the latest of a growing list of retailers to demand the government make changes to its ‘track-and-trace’ system with some businesses facing staff absences of up to 30 per cent.
In the week to July 7 the number of people pinged by the NHS app after coming into close contact with someone who tested positive for coronavirus skyrocketed 47 per cent, seeing an unprecedented 520,194 alerts sent to users.
Industry leaders and unions have warned that this was playing “havoc” with retailers who are already facing staff shortages in the wake of the pandemic.
Distribution centres, head offices and retail stores are reportedly suffering from an average staff shortage of 10 per cent.
Asos, Iceland and Sainsbury’s have all warned of growing staff absences due to “a lot of test and trace pinging”.
The staff shortages are impacting retail supply chains too, adding to the increasingly dire heavy goods vehicle (HGV) driver shortage crisis and leaving many factories at risk of shutting down entirely.
“The reports Unite is receiving from our members and their employers are extremely worrying,” Unite union’s assistant general secretary Steve Turner said.
“It is not an exaggeration to say factories are on the verge of shutting and that at some sites hundreds of staff are off work.”
Turner warned that if no changes are made, users will simply delete the app potentially leading to further spikes in covid cases.
“It is clear that something has to be done in time for July 19, or else people will simply start deleting the app en masse to avoid isolation notices,” he said.
“There will be public health consequences if test and trace is seen as a nuisance rather than an infection control measure.”
Uniqlo owner Fast Retailing cuts profit forecast as footfall drops
Uniqlo owner Fast Retailing has lowered its annual profit forecast as a result of additional Covid-19 related government restrictions in Japan and overseas denting footfall. Last week, a fortnight before the Olympic Games is set begin, Japan declared a coronavirus state of emergency in Tokyo. The group anticipates a 64 per cent increase in operational profit for the fiscal year ending in August, to £176 billion, a ten-billion-dollar reduction from the earlier estimate. However, profits increased to £149 billion in the nine months ending in May, up from £878 billion the previous year. Uniqlo Japan reported large increases in revenue and profit in the first nine months, with revenue rising 12.7 per cent year-on-year and operating profit rising 51 per cent. First-half revenue rose and profit “expanded significantly on the back of strong sales of products that fulfilled customer demand for stay-at-home items, as well as core Fall Winter ranges”. Revenue and profit also “subsequently expanded significantly in the third quarter compared to a low previous-year performance”. Strong sales of Uniqlo U T-shirts, Kando pants, and other summer ranges, as well as loungewear, super stretch activity pants, and other goods, improved revenue from March to May 2021. Its ecommerce revenue also increased as its online sales continued to expand, however the Q3 Uniqlo Japan performance still fell short of its business plan. At Uniqlo International, it saw a rise in revenue and a large increase in profit in the first nine months, with revenue up 9.8 per cent and operating profit increasing 88.7 per cent. Profit increased significantly in H1 due to improved profitability in its East Asia operations while all regions reported significant recoveries in the third quarter and the Mainland China market reported large rises in both revenue and profit. South Korea also moved back into the black in terms of operating profit. North America and Europe reported major revenue gains and smaller operating losses during the period as the Covid situation improved in those regions. Meanwhile, its GU operation saw revenue climb 7.1 per cent in the nine months and operating profit jump 18.9 per cent. GU performance “held steady year-on-year” while both revenue and profit “increased considerably in the third quarter”. From March to May, items such as chef’s pants, airy shirts, and coloured flared trousers contributed to the rise in revenue. However, more recently the group stated that sales struggled and GU performance fell short of its business estimates due to the announcement of another state of emergency in Japan and the fact that some GU products did not fully grasp the prevailing trend. And Fast Retailing’s Global Brands revenue declined with operating losses widening in the first nine months. Revenue fell 3.3 per cent and the segment reported an operating loss of £58 billion compared to a loss of £39 billion a year ago.
Face masks to remain compulsory in London's Borough Market
Customers and traders at the historic Borough Market in London will have to continue wearing face masks next week despite restrictions being eased by the government. The food trading precinct in south London, which contains produce stalls and restaurants, said it will be enforcing mask-wearing under by-laws passed by its Trustees. The decision comes after it surveyed visitors this week and found a “clear majority” are “in favour of mask-wearing beyond the government’s lifting of restrictions” in England next Monday. People will be able to remove face masks while eating and drinking in Borough Market’s hot food areas, which is the case under the current rules in restaurants and bars. It echoes the decision made by London Mayor Sadiq Khan that travellers on the capital’s transport network must continue to wear masks from next week and beyond. However, Borough Market’s decision bucks the trend in the wider retail sector, with big names like Tesco, Morrisons, John Lewis, Waitrose, Asda, Aldi, Sainsbury’s and Waterstones all saying that they would encourage customers and shop workers to continue wearing masks in stores rather than make it compulsory. Their decision is in line with government guidance published earlier this week, which for retailers said it “expects and recommends” masks to be worn by workers and customers in crowded, enclosed spaces from July 19 onwards. Borough Market managing director Darren Henaghan said: “It was important for us to understand how our customers felt, and the clear message we received was that they want masks to stay for the time being. “We have a responsibility to provide a safe and comfortable environment where the public can shop with confidence, so this is the right thing to do. “Our traders, who will also continue to wear masks, support this move as well.” In January, the market became the first outdoor retail venue in the UK to make face masks compulsory. Meanwhile, Spitalfields Market in east London said masks would not need to be worn in the outdoor market itself but the shops within it can ask customers to wear masks inside if they wish. “In the market itself, they are going to follow government guidelines,” a spokeswoman for Spitalfields told the PA news agency. “If the government is saying ‘No, you don’t need them inside’, then they won’t make it mandatory. “For the actual restaurants and shops that run around the edge, that will be at the discretion of those companies.”
Roger Binks consultancy retail update - 12th July 2021
A summary of this weeks headlines from the retail sector. The highs and lows covering the key stories from UK retailers, landlords, investors and brands.
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