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UK Retail Briefing: Inc Impact of COVID-19 - June 2020

ANALYST COMMENT – THE ‘NEXT-NORMAL’ OF IN-STORE SHOPPING 
There is demand for in-store shopping to resume
Figure 1: What consumers are looking forward to when social distancing measures are eased, 7-14 May 2020
However we know footfall will still be significantly impacted
Figure 2: Time spent in store, April-May 2020
Location will be crucial
Figure 3: Changes in local shopping, 16th April-3rd June 2020
Key to ensuring impact on footfall is limited is reassuring consumers
Figure 4: Aldi – automated ‘traffic light’ store entrance, May 2020
Hygiene a crucial concern
Figure 5: Co-op face covering sign, May 2020
Figure 6: COVID-19 behaviours when shopping for groceries, 28th May – 3rd June 2020
A further push toward a ‘cash-less’ future
Figure 7: Attitudes towards cash use, 16th April – 3rd June 2020
UK RETAIL SALES
Key points
Retail sales
Figure 8: Retail sales trends, January 2019 – May 2020
BRC vs ONS
Figure 9: UK retail sales y/y growth, BRC vs ONS, January 2018 – May 2020
Inflation
Figure 10: Annual % change in the consumer price index for selected product groups, April 2019 - May 2020
Inflation and wages
Figure 11: Real wages growth: Wages growth vs inflation, January 2016 – May 2020
Consumer confidence
Figure 12: Mintel Financial confidence tracker, January 2018 – May 2020
Looking forward
SECTOR FOCUS – CLOTHING RETAILING
What we have seen
Clothing sales take a nosedive in April
Figure 13: Growth in store based and online clothing sales, year on year, January 2019- May 2020
Footfall takes a hit as stores are closed
Figure 14: Reasons for buying new clothes, August 2019
Consumers intend to spend less on clothing in the next month
Figure 15: Percentage of consumers who said they intend to spend more, about the same or less in next month on clothing and accessories, 28th May 2020- 3rd June 2020
Consumer worry over the impact of COVID-19 on household income
Figure 16: How consumers expect COVID-19 to impact household income, 28th May 2020- 3rd June 2020
LAUNCH ACTIVITY AND INNOVATIONS
UK: Aldi offers customers ‘greater flexibility’ in new tie-up with Deliveroo
UK: Tesco to use 3D imaging technology to manage customer numbers in stores
UK: Instagram launches ‘Fashion Week 2020 Playbook’ to help retailers create digital catwalks
HEADLINES FOR THE MONTH
Co-ops
Grocers
Clothing retailing
Footwear retailing
Multi-sector retailing
Department stores
DIY retailing
Furniture retailing
Homewares retailing
Online shopping
Pets and pet products retailing
Shopping centres
Economy
NEWS ANALYSIS – FOOD AND DRINK
 BAKERS
UK: Greggs reveals UK expansion plans and aims to reopen 800 stores this month
UK: Pret to renegotiate rents to reflect ‘new retail environment’ post COVID-19
 CO-OPS
UK: Co-op
…expands robot delivery service as demand doubles
…teams up with personalised same-day delivery service Buymie
 CONVENIENCE STORES
UK: Costcutter reports on ‘one of its best-ever years’
 GROCERS
UK: Aldi rolls out ‘automated traffic light system’ across UK store estate
UK: Asda sales increase 2.3% but is partially offset by reduced demand for George clothing
UK: Lidl
…launches chatbox to inform customers when it is safest to shop
…launches online collection lockers
UK: Morrisons
…Q1 results up despite ‘volatile’ trading conditions
…extends its faster payment scheme to its suppliers
…introduces ‘speedy’ shopping queues for small basket shoppers
…opens first standalone clothing and homewares stores
…reopens pizza counters for customers
NEWS ANALYSIS – CLOTHING AND FOOTWEAR
 CLOTHING RETAILING
UK: British fashion designers collaborate to launch sustainable face masks
UK: Moss Bros resumes online trading after implementing ‘necessary operational changes’
UK: Mulberry to cut down global workforce by 25%
UK: Next to redevelop former Debenhams stores into first standalone beauty hall
UK: New Look urges landlords to make a ‘radical’ switch to turnover-based rents
UK: Online homeware and casualwear ‘overperforming’ at Urban Outfitters
UK: Owner buys Monsoon Accessorize out of administration
UK: Primark aims to reopen majority of UK stores by June 15
UK: Quiz appoints administrators to subsidiary Kast Retail in a bid to negotiate rent terms
UK: Reiss to reopen store estate in two waves
UK: ‘Significant’ job cuts expected at White Stuff amid COVID-19 crisis
UK: Ted Baker to launch fundraising effort to ‘navigate’ COVID-19 challenges
UK: UK arm of Victoria Secret falls into administration
 FOOTWEAR RETAILING
UK: Clarks to cut 900 jobs as part of its ‘Made To Last’ turnaround plan
UK: UK arm of Aldo falls into administration
NEWS ANALYSIS – MIXED GOODS
 MULTI-SECTOR RETAILING
UK: B&M posts ‘exceptionally strong’ sales in grocery, DIY and gardening categories
UK: M&S
…reopens 49 of its in-store cafés
…withholds bonuses for a second year
…reports a slump in profits and reveals its ‘never the same again’ agenda
 DEPARTMENT STORES
UK: Debenhams
…reveals more store closures in shopping centres after talks with Intu fail
…to reopen 50 stores across England from June 15
UK: Fortnum and Mason to begin phased reopening of food hall
UK: Harrods opens outlet at Westfield to help shift excess stock
UK: John Lewis
…announces plans for phased reopenings
…John Lewis Partnership donates £1.4m to local charities
…launches virtual wellbeing workshops
NEWS ANALYSIS – HOUSEHOLD GOODS
 DIY RETAILING
UK: Kingfisher reports fourfold growth in ecommerce since mid-March
UK: Topps Tiles slides to a loss amid a ‘complex and extremely challenging trading environment’
 FURNITURE RETAILING
UK: Furniture Village and DFS to reopen ahead of bank holiday weekend
UK: IKEA teams up with sustainability charity to drive circular economy goals
UK: ScS ‘well positioned’ to survive COVID-19 as it emerges from lockdown
UK: Wren Kitchen to open 100th showroom this year as it recommences expansion plans
 HOMEWARES RETAILING
UK: Dunelm launch click and collect car delivery service to reduce COVID-19 exposure
NEWS ANALYSIS – ONLINE
UK: Boohoo
…looks to future mergers and acquisitions after raising nearly £200m
…acquires remaining minority stake in PrettyLittleThing
…to sell DIY COVID-19 testing kits
UK: Businesses allowed to set-up shop on Instagram and Facebook with no fee
UK: Cox & Cox sees 64% increase in quarterly sales thanks to lockdown
UK: Ebay helps retailers shift excess stock in new initiative
UK: Eve Sleep sees ‘strong demand’ for its premium mattress and bedframe ranges during lockdown
UK: Morrisons and Pret expand Amazon presence with new partnerships
UK: N Brown sales down 25% as it fights ‘very uncertain environment’
UK: Sainsbury’s launches bike delivery service for stores outside London
UK: Snapchat teams up with adidas and Topshop in new ecommerce initiative
UK: Sosandar will start selling its clothing through the John Lewis and Next websites
UK: The Hut Group sales jump 24% driven by brand acquisitions and technology investments
NEWS ANALYSIS – OTHER RETAIL
 HEALTH AND BEAUTY RETAILING
UK: Boots to focus on digital launch for new No7 product as it reopens beauty counters
 BOOK AND STATIONERY RETAILING
UK: Card Factory profits down as it prepares for store reopenings
UK: Waterstones to reopen stores next week with ‘extensive’ store health and safety measures
UK: WHSmith revenues drop 85% year-on-year in April
 SPORTS AND LEISURE GOODS RETAILING
UK: Angling Direct reports losses blaming store acquisitions and ‘exceptional winter flooding’
UK: JD Sports creates a ‘mock-up’ store for managers to visualise new layout
 PETS AND PET PRODUCTS RETAILING
UK: Pets at Home warns profits to be materially ‘below the prior year’
 SHOPPING CENTRES
UK: Intu
…announces safety plans for its reopened shopping centres
…asks lenders to ‘freeze’ its debt during the ongoing COVID-19 crisis
…to draft in KPMG as part of its contingency plan if talks with lenders fail
UK: Property owner Landsec cuts portfolio value by £1.2bn
UK: Westfield
…reveals safety measures as it plans to reopen shopping centres
…reveals new campaign ‘Working Together’ to remind visitors how to stay safe
NEWS ANALYSIS – ECONOMY
UK: BRC
…reports a 19.1% decrease in sales for April
…shop prices in May fell at their fastest rate since 2006
…UK footfall decreased by 84.7% in April
UK: Shops may open in June according to new COVID-19 roadmap announced by the Prime Minister
UK: All non-essential stores to reopen from June 15 as lockdown restrictions ease
UK: April retail sales down 18.6% amid the COVID-19 peak
UK: Government considers suspending Sunday trading laws to help UK economy
UK: May sees retail sales decrease by 5.9%

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