UPDATED Coronavirus round-up: Next shutters its website in response to workers’ concerns, plus updates from Royal Mail, Sports Direct, Domino’s, The Hut Group, Next, Quiz, Dixons Carphone, the ONS and more
We’re reporting on the effect of the Covid-19 coronavirus on the way UK shoppers buy – and on how retailers are responding to that changing behaviour. This update comes as 11,658 positive cases have been confirmed by Public Health England as of 9am on March 26 and 578 people have died. This report includes updates on Domino’s, Iceland, Next, The Hut Group, Quiz, Topps Tiles, Dixons Carphone, the latest ONS figures and more.
Record bouquets delivered on Mother’s Day
Yodel says it delivered a record number of flowers over Mother’s Day this year – and that daughters are more likely to buy a gift for their mother than sons.
With people told to keep their distance from parents on Mothering Sunday, the courier made a record 228,000 deliveries of gifts ranging from flowers and cards to chocolates, toiletries and clothing, up 4% on 2019. Yodel currently delivers flowers for Serenata Flowers, Arena Flowers and Euroflorist.
Through analysing the 14,000 responses gained through Yodel’s Have Your Say customer feedback programme, the delivery company has established that daughters are 50% more likely than sons to buy a gift for their mums online. Nearly a quarter (22%) of women shopping online in the week leading up to Mother’s Day bought a gift for their mother, compared with just one in seven men (14%).
The most popular gift for mums overall this year was flowers, sent by two thirds (67%) of Mother’s Day shoppers. Men and women preferred to give different presents this Mother’s Day, with most sons choosing to give clothing and accessories (22%) and daughters opting for flowers (68%).
Yodel is currently recruiting for 500 self-employed courier and service delivery partner roles nationwide.
Sam Holden, chief commercial officer at Yodel, said: “Mother’s Day is a particularly sentimental time of the year and we’re proud to play a key role in delivering gifts up and down the country, especially during these unprecedented times.”
The data was taken from Yodel’s Have Your Say survey, run in partnership with Maru/Matchbox.
More retailers are closing non-essential online operations
More retailers are now closing their non-essential online operations in the face of the threat from Covid-19 coronavirus. Analysts say more retailers may well follow suit – but that they will raise questions about whether some businesses can survive a long-term shutdown. Read the full story here.
Royal Mail handles more ecommerce parcels – but fewer from clothing retailers
The Royal Mail said in a Covid-19 update to the stockmarket today that it had handled more business-to-consumer parcels over the last two weeks, as shoppers bought more online. Its tracked one and two-day deliveries and standard parcel post have both performed well, it said. But tracked returns had been lower than expected as the number of parcels sent by the clothing sector was weaker. Fewer parcels are also going through the Post Office, with declines in the last week as a result of restrictions in movement. Business-to-business parcels and advertising mail are also lower.
The delivery business said it expected full-year 2020 profits to remain in the range of £300m to £340m, but that its parcels division was now expected to be loss -making in the 2021 full-year, amid “significant business uncertainty”.
It said it had seen “rising levels of sick absence as colleagues self-isolate or care for family members”, and added: “We cannot rule out reductions to services as Covid-19 develops.”
Rico Back, group chief executive of Royal Mail, said: “We are focused on protecting our people, company and the communities we serve during this unprecedented crisis. We are putting the health and wellbeing of colleagues and customers first. At the same time, we are delivering the parcels and letters that are a lifeline for those who cannot leave their homes.
“We are entering a period of significant uncertainty in a good financial position. We have a strong balance sheet. We have substantial levels of liquidity and low levels of debt. We are taking immediate steps to further reduce our costs and protect our cash flow.”
The business says it is holding cash of more than £800m, and has a £925m debt facility.
In a Royal Mail press release, Shane O’Riordain, Royal Mail managing director of regulation and corporate affairs said: “As one of the UK’s essential services, Royal Mail remains open for business while the nation remains in lockdown. We know that the Universal Postal Service provides a lifeline to businesses and communities everywhere.
“In line with Government guidance, online retailers continue to do business. And so do we. The delivery of parcels and letters has become even more crucial as a way of keeping the country together, businesses operating, and helping many people who may not have the option to leave their homes.
“At Royal Mail, we understand the important role we have to play in helping people to stay connected. We continue to work hard to collect, process and deliver as much mail and parcels as possible in difficult circumstances.
“The mail is still scheduled to be collected and delivered as normal. This is a fast-moving situation and local service levels may at times be impacted by local absences. Despite the challenges, we remain committed to deliver the most comprehensive service we can to all our customers in these difficult times.
“We would like to thank all our colleagues across the UK for helping to keep the nation connected in such challenging circumstances. Their work at this time is hugely appreciated.”
Mike Ashley apologises for Covid-19 approach
Mike Ashley, chief executive of Frasers Group, has written an open letter to apologise for both his own actions and those of the Frasers Group in recent days. Those actions include first seeking to keep Sports Direct and Evans Cycles stores open as essential businesses and then calling and writing to the Government pressing for clarification of whether they could open.
In his letter today, Ashley said: “Given what has taken place over the last few days, I thought it was necessary to address and apologise for much of what has been reported across various media outlets regarding my personal actions and those of the Frasers Group business.
“Our intentions were only to seek clarity from the Government as to whether we should keep some of our stores open; we would never have acted against their advice. In hindsight, our emails to the Government were ill-judged and poorly timed, when they clearly had much greater pressures than ours to deal with. On top of this, our communications to our employees and the public on this was poor.
“There has been no dress rehearsal for what we as a nation are currently tackling, and I for one am immensely proud of how our Government, our NHS and all of our key workers have handled the situation so far. I would especially like to thank my Frasers Group employees, who have stood by the business in difficult times before and are doing so again currently. We are working very hard to save our business, so that we can continue to be one of the biggest employers on the UK high street once this pandemic has passed.
“Outside of Frasers Group, I have offered our support to the NHS and we are poised and ready for when that offer is accepted, with our entire fleet of lorries at their disposal – to help deliver medical equipment and supplies. This offer is not limited to the NHS but all key workforces across the Government. We will help wherever possible.
“Finally, to reiterate, I am deeply apologetic about the misunderstandings of the last few days. We will learn from this and will try not to make the same mistakes in the future.”
Domino’s Pizza recruits as it goes contact-free delivery-only
Takeaway pizza business Domino’s is looking to take on more staff following a move to contact-free, delivery-only orders.
Domino’s Pizza chief executive David Wild said in a Covid-19 update today: “We’ve been working closely with the wider industry and Government, and are keen to do all we can to support our customers and communities by safely delivering hot food to help people stay at home during this difficult time. The safety of our colleagues and customers is always our top priority, so we’ve strengthened our already high hygiene standards, rolled out contact free delivery and switched to delivery only to ensure we can confidently serve the public. We are also looking to recruit additional store colleagues and delivery drivers.
“I’d like to say a big thank you to all our colleagues and franchisee partners who are working incredibly hard to keep Domino’s delivering. Domino’s is at its heart a delivered food business, and we’re working around the clock to keep our supply chain operational, our back-office colleagues working from home, and our stores making great tasting pizzas for our customers.”
The business says it is focusing on ensuring staff, customer and franchisee safety and says it continues “to be the leader in safe food delivery in the countries in which we operate”.
It says trading in January, February and the first two weeks of March was in line with expectations, with UK like-for-like sales up by just over 3%. Since then UK sales have grown faster, with orders for delivery more than making up for the lack of collections, which usually make up 20% of sales. Shoppers are ordering more items per order.
But in its Norway, Switzerland and Iceland markets, about 16 stores have been temporarily closed as a result of labour shortages and low demand.
Domino’s says its net debt stood at £232.6m as of December 19, and is currently slightly lower than that. It has headroom of £99.6m with its £350m of lending facilities.
Iceland boss urges shoppers to leave online shopping slots to the most vulnerable
Supermarket Iceland’s chief executive Richard Walker today urged healthy shoppers to come into its stores to buy food, while leaving online slots to those who are most vulnerable to the disease. “I would urge the opposite of the PM,” he told BBC Radio 4’s Today programme. “If you are healthy, not in a vulnerable category and adhere to social distancing guidelines, please do shop in-store.” Doing so, he said, “will enhance priority online for those who need it most.”
The BBC also reports that supermarkets will be able to use a Government list of the most vulnerable people, who include older shoppers and those who have chronic illnesses, to enable those shoppers to follow Government advice to order online. This would potentially enable shoppers most in need to order online.
Meanwhile, The Guardian reports that millions will need food aid in days as the virus exposes structural weaknesses in food supply systems.
Next pauses its online business
Retailer Next last night took the decision to close its warehousing and distribution operations and put a pause on its online business. Visitors to the fashion-to-homewares business, ranked Elite in RXUK Top500 research, are met with the message that the retailer will not be taking any more orders until further notice.
Next said in a statement: “Next has listened very carefully to its colleagues working in warehousing and distribution operations to fulfil online orders. It is clear that many increasingly feel they should be at home in the current climate.
“Next has therefore taken the difficult decision to temporarily close its online, warehousing and distribution operations.”
Next’s decision comes days after Games Workshop decided to close its warehouses as well as its shops.
The Hut Group recruits as online demand surges
The Hut Group (THG) says it is bringing forward more than 500 new jobs across its manufacturing and distribution sites, following a surge in demand for its health, beauty and nutrition products.
The Manchester-based sells via brands including Myprotein.
About 350 of the jobs will be at its manufacturing and fulfilment centre in Warrington, Cheshire, and the remaining 150 at its sites in Wroclaw, Poland and Kentucky, USA. More jobs could be unveiled should increased demand continue.
Matthew Moulding, founder and chief executive of THG, said: “Some of the region’s biggest employers have had to make incredibly tough decisions in recent days, leaving a worrying number of people out of work at such a vulnerable time. Our message to those affected is that we will look to do whatever we can to help, and so we are bringing forward our recruitment plans. We are now hiring across our manufacturing and logistics sites with immediate effect. We need you and would be thrilled to provide you with a new opportunity at this incredibly challenging time.”
The group says it is also seeing record demand for
Spending up by more than 20% online and at supermarkets: study
Shoppers have spent an extra £361m a week in supermarkets since the Covid-19 outbreak began, a new study suggests. The report, from Blacktower Financial Management Group finds that each household is spending an extra £13 a week, based on a weekly food bill of £60.60, and adding up to £361.4m altogether across 27.8m households – a rise of 21.4%.
The study also suggests that online sales are up by a quarter (25.5%) as a result of Covid-19.
John Westwood, founder and group managing director at Blacktower, says: “Supermarkets and a range of ecommerce retailers have been overwhelmed by increased purchasing because of panic buying amid the coronavirus outbreak. During this unsettling time retailers need to ensure food and supplies are well stocked in order to meet with consumer demand.”
Central England Co-op introduces screens and cuts opening hours to protect staff
Central England Co-op is introducing screens at tills to protect its staff from Covid-19, while also cutting opening hours to allow for store cleaning and shelf replenishment as well as more time to rest.
The retailer has also brought forward its annual profit share and increased its staff discount.
Central England Co-op chief executive Debbie Robinson said: “Our colleagues and key workers are doing everything they can to ensure our communities continue to be supported during this uncertain time.
“In the spirit of co-operation, we wanted to say thank you by giving them a little something to showcase our gratitude for their hard work and dedication. We also wanted to say welcome to all of our new colleagues who have joined in the past few days.”
Quiz visitor numbers fall online and in-store
Fast fashion multichannel retailer says visitors both to its store and its websites have seen a “substantial reduction” since the outbreak of Covid-19 at the beginning of March. It took the decision to close its shops and concessions on Saturday, days before the government ordered non-essential retailers to close.
Previously, its performance had been in line with expectations. But the retailer now says its sales and profit margins for March are now expected to be “materially below the board’s expectations” and that it cannot provide financial guidance for the year to March 2021 at this point.
It says it had net cash of £8.3m as of March 24, and £4 million available in lending – which it is now looking to renew before they expire on April 23 2020.
“The group is continuing to take steps to preserve cash by eliminating non-essential spend, postponing capital projects, substantially reducing stock intakes and deferring payments wherever possible,” Quiz said in today’s trading update.
Intu shopping centres now semi-closed
Intu is in discussions with the Government and says it may look to borrow from its £330m business support scheme. it says that its shopping centres in both the UK and Spain are now semi-closed as only essential stores, such as supermarkets, pharmacies and banks, stay open. It says that it only received 29% of rent due on yesterday’s quarter day, while at the same time last year it had received 77% – threatening its ability to meet its own payments on lending.
The company had cash and lending of £184m available on March 24 and says it expects to get the £95m proceeds of its sale of Intu Puerto Venecia in the middle of May.
Intu says it is cutting back on head office spending to maintain cash, and is reducing its non-essential service charge costs, passing savings on to its retailer customers.
The company said in a Covid-19 update today: “Other Government measures announced of business rates suspension, employee cost support and tax payment deferrals, are also expected to have a positive impact.
“Given the ongoing uncertainty around Covid-19, we are no longer able to provide guidance in relation to the 2020 financial year. In these difficult times we continue to assess all strategic alternatives and will provide further updates as appropriate.”
Topps Tiles goes online-only as store staff are furloughed
Topps Tiles is now operating only online and today said it was working to fulfil customers orders “to the extent possible within the constraints of the UK government restrictions”.
In the 12 weeks to March 21, retail sales were down by 3.1%, it said in today’s trading update.
Topps aims to protect the business so that it is well-positioned to recover once the situation returns to normal. It has about £20m in cash, with £39m lending full-drawn down – and it expects net debt to stand at about £19m when the half year ends on March 28. Further lending of £11m is currently subject to lender approval.
It says it is using the Government’s job retention scheme to furlough staff who work in stores, and it is taking steps to cut costs, preserve cash and retain flexibility.
Looking to the full-year, Topps Tiles’ board said: “While assessing the outlook with accuracy is impossible, it is clear that the Covid-19 pandemic will result in a material reduction to our expectations for revenue and profit for the second half of the financial year. In these circumstances, the group is withdrawing its financial guidance for FY20 and does not expect to pay an interim dividend this financial year.”
Dixons Carphone online business booms as shoppers stock up on technology
Online trading has been brisk at Dixons Carphone websites as people buy the technology that will allow them to work, live and be entertained at home. Read the full story here
Retail ’before’ coronavirus picture
Thursday started with the ’before’ picture showing how retail sales stood before coronavirus hit. The February retail sales report shows online and store sales up, slightly, compared to the same time last year, although store sales were down compared to the previous month. Even before the virus struck, it seems the picture wasn’t altogether healthy. Read the full story here.
Image courtesy of The Hut Group