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February 2021 update

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Covid-19 – infections and injections

A new year has done little to shed the shackles of Covid-19. As the nation works its way through the third national lockdown, and with cases of the new variant raging, Rachel Symonds brings readers up to date with the latest industry developments

On the day of writing the Health Food Business Coronavirus update, the UK hit a new, rather sombre milestone. It was on that day that cases of Coronavirus peaked at 62,322 and deaths hit a tragic 1,041, the highest since the first peak in April. A few days later came another sobering high of 1,564 deaths. This all came in the same month that England was plunged back into a third national lockdown, with similar restrictions also implemented in Scotland, Northern Ireland and Wales.

These rapidly moving developments came at a time that should have been one of hope, as the second vaccine, this one developed by Oxford University and AstraZeneca, was approved by the MHRA, then followed by Moderna also securing approval, meaning we now have three vaccines being rolled out.

However, it is the combination of this new, rapidly spreading Covid-19variant, the rising pressure on the NHS, along with concerns about getting the vaccines efficiently rolled out to the most vulnerable that has resulted in this situation. Of course, our industry can remain open, with health stores, wholesalers, suppliers and manufactures considered essential. But that doesn’t make it any easier for those on the ground, still having to operate social distancing, reduced footfall and new challenges from online.

Speaking at a Downing Street press conference at the time of HFB writing, Boris Johnson commented: “When the Office of National Statistics is telling us that more than two per cent of the population is now infected, that’s over one million people in England, and when today we have reported another 60,000 new cases and when the number of patients in hospitals in England is now 40 per cent higher than at the first peak in April, I think obviously –everybody, you all – want to be sure that we in Government are now using every second of this lockdown to put that invisible shield around the elderly and the vulnerable in the form of vaccination and so to begin to bring this crisis to an end.”

He revealed at that point, with the Pfizer and Oxford/AstraZeneca vaccines combined, that more than 1.1m people had been vaccinated in England and over 1.3macross the UK, including more than 650,000people over 80.At the time of going to press, just under four million people had received their first vaccinations in the UK.

From a business perspective, the week England went into lockdown saw Chancellor, Rishi Sunak, announce a new£4.6bn support package to businesses in the retail, hospitality and leisure sectors in one- off grants worth up to £9,000, while a£594m discretionary fund was made available to support other impacted businesses.

Sunak commented: “The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further. Throughout the pandemic, we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the spring. This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.

“The Government has also provided 100 per cent business rates relief for retail, hospitality and leisure businesses,£1.1bn existing discretionary funding for local authorities, the furlough scheme now extended to April and 100 per cent Government backed loans, extended until March.”

So, how are retailers faring on the ground? And what are the expectations for the overall high street as we look ahead towards spring?

A new lockdown

The new year, despite being under tier restrictions, had started well with the news that the first people were to receive the Oxford University/AstraZenecaCovid-19 vaccine – yet on that same day, the country went back into lockdown.

The vaccine jab was authorised by the Medicines and Healthcare products Regulatory Agency (MHRA) after it began a rolling review in September and was the first approved vaccine which can be stored at fridge temperatures.

The Government has secured access to 100m doses of the vaccine and says that more than 730 vaccination sites have been established across the UK and hundreds more are opening to take the total to over 1,000. However, at the time of writing, concern was being raised about the rollout.

The vaccine, which was backed by significant Government funding, will be available for free across the UK and the government is working with the devolved administrations to ensure it is deployed fairly across the UK.

Health Secretary, Matt Hancock, commented: “This is a pivotal moment in our fight against this awful virus and I hope it provides renewed hope to everybody that the end of this pandemic is in sight. Through its vaccine delivery plan, the NHS is doing everything it can to vaccinate those most at risk as quickly as possible and we will rapidly accelerate our vaccination programme.”

But what impact has this had on our economy, with high streets effectively now being shut? The data shows it has been a mixed bag; November saw sales rise on the high street, and our own retail panel have reported, in the main, that December was a relatively buoyant sales period.

Responding to the latest ONS Retail Sales figures, which showed a 7.6 percent increase in overall sales (retail sales excluding fuel), Helen Dickinson, Chief Executive of the British Retail Consortium, commented: “Retail sales growth slowed slightly, as many shops in England were forced to close during the November lockdown. Clothing, footwear and bookshops were all particularly badly affected by the forced closure over the month, including Black Friday, and saw sales drop significantly. On the other hand, higher sales from retailers who remained open, bolstered by stronger online and click-and-collect operations, kept growth positive overall in the run up to Christmas.

“This headline growth figure masks significant challenges for many businesses on high streets across the country, as sales have plummeted, and they face the threat of rising costs which they cannot afford. The Government should look to support these businesses through a targeted extension to Coronavirus business rates relief or we will see further unnecessary store closures and job losses.”

And what about independent retail overall?

Andrew Goodacre, CEO at the British Independent Retailers Association (Bira),of which the NAHS is part of, told Health Food Business: “It’s been no different to the first wave in that essential shops have traded well and non-essential have really suffered, especially with missing most of the busy and all-important festive period. We have been pleased with the way many independents have improved their digital presence. Supply chains were interrupted due to problems at ports but generally speaking, demand was met.”

And speaking from a retail perspective, has Bira seen issues with suppliers doing more direct to consumer business? “We are aware that some wholesalers that normally are trade only have been letting in general public. Also, some supplies have a much stronger presence online. This is a concern for the future,” he added.

Industry approach

Retailers have had to adapt fast as the virus takes on a new course – and now we find ourselves in a third national lockdown, this adaptation will continue. However, on the plus side, we know panic buying has abated from the first time, and we also know retailers are much better placed with PPE, social distancing, click and collect and home delivery.

Gary Trickett, owner of two Healthy Route stores and Chairman of the National Association of Health Stores (NAHS),and speaking prior to the third lockdown being announced, commented: “Sadly, our Leicester store is now well past six months in tier three-plus, with Leicester being the first city to enter a lockdown at the end of June. Our regular customers still manage to make it into the city centre and sales have stabilised around 60 percent (against last year). The city centre is missing the office workers though. These folk are the people who pop in during lunch to pick a snack or buy their vitamins. Now furloughed or working from home, they are either buying products from the local community, suburban stores, in the supermarket or via mail-order. Until these people are encouraged back into their city centre offices, the city will not return to any sense of normality.

“As a local community store, our West Bridgford store has fared far better than the city centre Leicester store and is trading around 90-95 per cent against 2019.”

And Ray Hill, owner of Sunshine Health Shop, which has two stores in Stroud, added: “I was quite surprised how different the customer response was at the second lockdown from that during the first. It was very obvious the first was panic buying and the second revealed a gentle move toward normality, certainly during the first two weeks when takings dropped from the weeks before by 10per cent. However, the last two weeks came back with sales well above the norm, created by a demand for Christmas merchandise.

“Following the end of the second lockdown, sales continued to go well, with much of the Christmas stock gone. What was a bit disconcerting was the fuss made by the authorities on how we had to follow the rules on staff and customer protection during the second lockdown. Until then, both shops, the food one and the supplement one, had traded normally, apart from two metre marking on the pavement. Neither staff nor customers were under any obligation from us to wear masks or face guards, although most did. We did exercise control of customer numbers in the shop at any one time.

“During all those months, we had no problems. The customers would remark how comforting it was to be able to shop and chat like normal times. So, come the second one, the fear factor had got to many, including those detailed to keep an eye on us, and we were subjected to all the formalities designed to make life miserable for customers and staff. One would feel the inconvenience would have been worth it if the lockdown principle had worked, but as I write this, it clearly hasn’t.”

He added: “Sometimes, we have had to employ additional staff to serve those who choose not to enter the shop and prefer to wait outside while we fetch items they need. Speaking of staff, we had three people from our complement of 12 who chose to furlough during the first lockdown and none during the second. On both occasions, none of our staff have gone down with Covid, or, as far as we know, any of our customers. Those furloughed during the first chose to work through the second, which, in this instance, indicated a lesser concern with regard to health issues.”

And looking more specifically at Christmas trade, usually such a busy time for independent health food stores, what is the picture looking like?

Gary commented: “Traditionally, both stores have kept festive lines to a minimum and this year has been no different. Sadly, demand for Tofurky Roast and VB Festive Roast has outstripped supply. Other than that, nothing too exciting to report!”

From a Bira perspective, Andrew commented: “No figures but anecdotally those shops allowed to trade all the time have done well. We are concerned about business classed as non-essential, and those essential shops experiencing low footfall (travel hubs, city centres). Footfall has never been better than 70 per cent of normal, apart from early December.”

Changing Demands

While flour, toilet roll and immune boosting products were being snapped up by shoppers in the first lockdown, as we all know more (and panic a little less), inevitably, trends will shift. So, what demand is being seen on the ground?

Gary reported: The biggest trend seen this autumn and winter has been the increased demand for vitamin D. Sales of flour and home baking ingredients have held up well. Snacks, toothpaste and bodycare have dropped, as well as essential oils. Supplements and foods have held up better and teas are over 30 per cent up.

“We have seen a growth in combination products requests – ‘Do you sell a turmeric and vitamin D product?’, ‘I have seen a vitamin C product with CBD and magnesium, do you sell it?’. Most of which we are unable to source or the efficacy is so low, we would not consider stocking them. On the flip side, we have seen an increase in out of stocks from our direct supplement suppliers and our general wholesaler. Sadly, Covid has created all sorts of pressure on the supply chain and the consequences are spaces on the shelves.”

Expanding further on issues around supply, Ray commented: “A worldwide pandemic is bound to have an impact on supplies, and it has resulted in out of stocks, to the detriment of customer goodwill, though most understand when you explain. It has an effect on the takings, too. But I am confident the high streets will still be a very important consumer destination when all this is over.”

And what trends are being forecast as we move through 2021?

“It is hard to predict where people’s interest will be as we move through this new year, though I am certain the drive to clean the planet will lead to innovation, not just new products but new environmentally-friendly packaging,” Ray commented. “There is a long way to go with the latter. In fact, it is worrying that so many items still arrive in plastic. There is consumer conflict at present in areas where there is choice – ‘do I chose my usual one in plastic, or a different one in environmentally-friendly packaging that I may not like?’. You can see it as they contemplate their dilemma. What is encouraging is how much has changed and it is the customers who are doing it, given the choice. That trend must become the norm. And those suppliers who ignore the public mood will be bypassed as time progresses.”

Gary added: “Veganuary is now firmly established and creates a focus for the start of the new year. Last year saw over a 30 per cent rise in vegan product sales for us. Hopefully, the same will happen again this year. Organic and food state supplements seem to be in more demand too, with brands like Terranova and Viridian seeing steady sales increases. I have just taken a vegan frozen ready meal range on, sales have gone remarkably well, though too early to say whether this is a trend yet.”

Planning ahead

One of the biggest issues for the high street is restoring customer confidence, but with a third national lockdown, what are the feelings for the future?

“Our Leicester store is in The Lanes area of Leicester. Traditionally, the home of the independents. My fellow retailers are very pessimistic of the future and sadly, unless there are major changes to shopping habits and the way Government taxes retail, things do not look good (in my opinion),” Gary commented.

“Nationally, recently, we have seen some big retail players close. These pay big business rates and employ large numbers of people. They contribute to the retail mix of a city that pulls people into shop. Small independents, like us and the stores around us, are not a big enough draw to keep a city centre alive. We are in a national retail crisis, and thankfully as a member of the National Association of Health Stores, we know the NAHS and its links to Bira means conversations as to the future of the city centre are already started.

“On a positive note, some consumers are making an effort to shop small, shop local and shop independent – long may this continue!”

He added: “I do not necessarily mean this in a negative way, but we will not ‘return to any sense of normality’. Changes in online retail that were expected to happen in the next five years or so have happened in less than a year. A number of large retail groups have disappeared off the high street and new uses need to be found for such spaces (both the Debenhams and Fenwick stores, in Leicester, are being converted into apartments, for example – who would have believed that a couple of years ago?). So, the high street has changed, retail will adapt, there will be casualties and new businesses will blossom. ”

Ray went on: “2020 will go down as a difficult and frustrating year, yet we in health food retailing have certainly done better than most. Our thoughts should go out to those shops that had to shut during the lockdowns and wish that they will survive. For there is little doubt we will need them or newcomers to respectively maintain and fill those high street shops.”

Speaking generally for independent retail, Andrew reported: “A difficult first quarter, with the lockdown probably with us until the end of March. More large chains closing more shops because people will work flexibly and not return fully to the offices in the city centres. The online growth will be retained but independents who can connect and engage with their local communities will do well. As life returns to normal, I expect discretionary expenditure to return to clothing, health and beauty, instead of homeware and DIY. For retail to return to a sense of normality depends on how quickly the vaccine can be rolled out –six to nine months.”

But Andrew also called for further support for independent retail to ensure stores can survive.

“The businesses are more vulnerable now than they were last March because the previous 10 months have been so badly interrupted. The grants available now need to be higher and we need to see 100 per cent rates relief to the non-essential retailers for2021/22.”

And what impact is expected of vaccine roll-out on shopping behaviour.

“It is interesting, when customers confer with us how there is an underlying conviction that these lockdowns are simply to ease the pressure on the NHS and have little to do with protecting the community, which is evidenced on both occasions so far by the serious rise in hospitalisations and deaths afterwards. It indicates a delaying process, and one wonders how many times we have to live with this situation,” Ray commented.

“To be dependent on the vaccine programme, with little evidence as yet that it is the saviour of us all, may or may not prove to do the trick. We will have to wait for quite a long time for confirmation. Meanwhile, we can look forward to how smoothly the Brexit result affects supplies!”

Gary added: “Our customer base seems equally split between those who will take up the offer of the vaccine and those who see it as a ‘world conspiracy’. I’ll stay on the fence for this one!”

Andrew added: “We hope the vaccines will return confidence when lockdown is lifted but we need help from the Government to do this.”



*This article was originally published in the February 2021 issue of Health Food Business magazine. Statistics were correct at the time of publication.


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