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UPDATED 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 5,683 positive cases have been confirmed by Public Health England as of 9am on March 22 and 281 people have died.


What are shoppers looking for online?

There has been a huge shift in consumer’s 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.


The study was commissioned by marketplace and social media advertising specialist Adzooma.


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 much sought after commodity right now, toilet paper, actually remained fairly steady, with a rise in the UK, along with minimal upscale in the US and Australia.


“Invariably more consideration has been given to ‘self-isolation’, albeit the search volume wasn’t as high as other keywords. In most European countries, the keywords didn’t even break a thousand searches a month. However, one thing every country had in common was a spike in February 2020. This was most noticeable in the UK, which grew from 330 searches in November to 8,380 searches.”

The study also identified a massive boost for the Corona brand and a surge in pasta.


Tthe UK also saw the biggest increase in search volume for pasta. In one month alone – December 2019 to January 2020 – keyword searches rose by 151%. Since then, it has settled and dropped back down to 1,827,690 by February 2020. Hand sanitiser saw one of the biggest increases in search volume for every single country.


Sales of toilet paper increased 311% on Amazon.co.uk&source=gmail&ust=1585057547663000&usg=AFQjCNEBxLuX24nSkuudFV2L0XDNrWZTsg“>Amazon.co.uk between February 19 and March 12, said Adzooma, and between December and January, face mask searches more than doubled in the USA and went up by 372% in Australia.


Google took action on the keyword, banning adverts for face masks in an effort to stop misinformation about coronavirus. Amazon sales were not affected by this ban though, says Adzooma. Between the February 12 and March 12 face mask sales had increased by 335%. In addition, the average price steadily rose, going from £15.90 to £16.75.


The UK had more searches for ‘panic buying’ than any other country. The search volume increased from just 110 searches in November 2019 to 5,410 searches in February 2020. That’s growth of nearly 5000%.


Wass added: “In every related product, average Amazon UK sales and prices increased, posing a potentially lucrative time for the business.


“With the expected impact of lost retail sales in the EU expected to hit £3,264 million, this may also have a detrimental effect to the high street and a boom in online-only retailers. However, for now, it’s unknown just what may happen.”


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

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