Retail – the long road to recovery
A delayed stage in the Government’s roadmap to reopening and a rise in cases of the Delta variant of Coronavirus has led to a more unpredictable month in the world of the pandemic. So, how is retail performing amid these continued challenges?
If the Covid-19 pandemic has taught us anything it is that anything can happen and we should expect the unexpected. And this has been evidenced this month as we have seen the perhaps unsurprising delay to the full reopening of the country with a four-week postponement until July 19.
With cases rising, and suggestions we are moving towards a third wave, the delay in the final stage of the Government’s roadmap is hoped to bring about a slow in the hike in cases to allow time for more people to be vaccinated. But what does this mean for retail? Given the high street has reopened, and will remain so despite the delay, is there an impact on shopper confidence, and what are suppliers and retailers within our trade reporting at the moment?
Looking at the overall situation with the high street, a statement from the British Retail Consortium (BRC) was headlined ‘Retail on the long road to recovery’ and perhaps epitomised where things are right now – moving in the right direction, taking time to see footfall restored, and with additional challenges on the other side of the pandemic because of the likes of the rise in online shopping.
The BRC was commenting in response to the latest ONS Retail Sales Index figures, which showed a 22.3 per cent year-on year increase in overall sales, with Helen Dickinson, BRC Chief Executive, advising: “The third month of rising sales will be welcomed by retailers who are still recovering from months of lockdown during which many were unable to open stores. The reopening of hospitality provided additional impetus for many of us to hit the streets, particularly as the summer weather begun to kick in. “Retailers reported an increase in purchasing over browsing, suggesting shopping trips were becoming more purposeful. Furniture and floor covering sales continued to perform well, as consumers took the opportunity to try things in-store, while even clothing and footwear saw continued growth thanks to the warmer weather and easing of restrictions on meeting friends and relatives. Consumer confidence appears to be rising fast thanks to both the widespread vaccination and testing programme and the extensive measures taken by retailers.
“Challenges remain. Many retailers built up considerable debt, including from rents, during the periods of lockdown, and will be relying on continued consumer demand to trade their way out. Those based in larger cities have also been hardest hit by the fall in footfall, as many city workers continue to work from home. The changes caused by the pandemic are being bolstered by a fundamental transformation in consumer behaviour, which started long before Covid. Internet sales continued to rise, albeit at a reduced pace, supported by the massive investment in digital channels, logistics operations, and click-and-collect options, ensuring UK consumers continue to benefit from a world leading shopping experience whether they are in their homes or their high streets.”
Health food experience
If we turn the attention to the health food trade, especially independents, we are seeing mixed fortunes, although there is a sense that planning for future initiatives in-store is beginning again after a year of focusing on the immediate need to serve customers and make stores Covid secure.
Julie Goodwin owns two Natural Health stores in Hertfordshire and commented: “The footfall in both shops is down around 20 per cent on pre-pandemic levels. It has been slowly improving but is plateauing out at the moment.
“Customers are generally more confident to come out and shop. We still have a lot of people who are very nervous about being out and they spend the absolute minimum time in the shop browsing, others are very confident and are shopping as they were in prepandemic times. This does lead to some tension at times where some people are very anti-vaccine, refuse to wear a mask and are not that strict on social distancing, whereas someone else in the shop might have been shielding for many months and are very nervous about coming in.”
And in a survey of its members, the National Association of Health Stores (NAHS) reported a range of opinion. Key points raised by retailers include:
Footfall is generally steady, with some retailers up and others down, but not much improvement since the high street
reopened. Cities are affected to a greater degree, while some noted footfall has fallen since non-essential retail reopened.
- Cautiously optimistic was a phrase used in the survey in terms of the future, with expectations lowered.
- There is a need to continue with guidelines in store to reassure shoppers, many of whom remain nervous about shopping.
- Stores are seeing regular customers but less of those browsing for pleasure.
- The likes of home delivery and click and collect are continuing for some retailers to provide a unique service and experience that major chains cannot.
- Out of stocks noted as one of the key issues.
- Vitamin D remains one of the key product categories in store.
If we then look to the trends we’re seeing – something that has been so changeable over the last year – Julie commented: “Throughout the pandemic, immune health has been very strong on sales, this then has been replaced somewhat by people who have problems sleeping, anxiety, and digestive issues brought on by stress. This now seems to be abating a little and we are seeing lots of people coming in for sun creams, hay fever remedies etc.
“Customers with long Covid are increasingly visiting the shop looking for natural remedies for a whole multitude of symptoms. A lot of them feel like they are the only ones with the seemingly random symptoms, but we are seeing certain patterns of symptoms building up as time goes on. Hair loss, anaemia, increasing inflammation and allergies, tiredness, numbness and tingling in extremities etc. It would be good to build up a support package for these people who are often
bewildered by these symptoms that they are now suffering from.”
From the NAHS survey it was reported: “Trends have changed, we are selling more VMS products and customers are much more aware of product quality, checking before they buy. It is a battle to keep customers away from the internet and shop local.”
And what challenges are our independent retailers finding now that the UK high street has fully reopened?
“It’s fantastic to see customers returning to the high street and how much many of them like to support their local high street. However, furlough is winding down over the next few months so staff will be returning to their previous hours, business rates are being resumed and landlords want their rent in full,” Julie commented.
“Many customers now prefer to shop online, which is becoming their preferred way to shop. I have also noticed that we do have an increasing number who come in or phone in for advice, then search out the products and buy via the internet.
In addition, many use Dr Google or Instagram influencers for their healthcare advice and are looking for products recommended by them, which we do not sell or are not available in the UK. We will really have to see a good increase in footfall and average spend to offset these challenges.”
She went on: “I would anticipate a gradual increase in trade but would expect that we won’t be up to pre-pandemic levels until 2022 at the earliest. Hopefully, most of the shops in our high streets will remain open as that makes a huge difference to footfall to the towns.”
And in the NAHS survey, in terms of challenges as we come out of lockdown, it reported: “Getting stock levels right, continuing to refresh the shop to make it inviting and realising that many people will still be cautious about being around people. We are also noticing some tension and anxiety in staff and customers about the lifting of further restrictions in a few weeks and if it will actually happen. The effects on our mental health have been huge and will be long lasting. We need to remember that.”
And long-term, will store operations shift on the back of lessons learnt during the pandemic?
Julie reported: “During the pandemic, I used the time to look at every aspect of my business, from staffing levels to accountancy. I have made many changes to make the business stronger. I now have a great team of knowledgeable staff who work together really well and have freed up some time so that I can look at the overall business picture and am able to plan for the future. Here’s hoping anyway.”
Meanwhile, the NAHS survey reported: “I am hoping trade will continue to increase. People are fed up with staying at home and want to come out, however, the high street and the independent retailer has to offer a shopping experience, rather than just shopping (that is my belief). It will be a case of moving people away from internet shopping and helping them to shop local.”
It’s clearly been a challenging time for suppliers across our sector, not made any easier with the challenges around Brexit. But where are brands now with supply, and how is trade performing?
Martin Watson is Country Manager for Au Naturel UK, which supplies health food stores in the UK with brands including Solaray, Heritage Store, and Life Flo and commented: “Trade was obviously buoyant during the lockdowns with our online retailers, but since opening up, we are finding our bricks and mortar retailers starting to show large increases.
“Supplements are doing well across the board, in particular, vitamin D, as they have done throughout the various lockdowns, even when non-essential shops were closed. I believe this is primarily because people continued to order them online, there was an increased interest in them due to being in the midst of a pandemic and they’re much easier to sell online and deliver than health food products. As a Solaray supplier, we are seeing a return of usual habits, through good sales of our usual key sellers, such as Cholesterol Maintenance, Vitamin D3 + K2 and D-Mannose.
“One trend that has emerged that was a surprise is increased sales of chlorophyll products, thanks to a viral TikTok video about chlorophyll water, which has led to more sales of items like Solaray Chlorophyll tablets.”
And Colin Tricker, Business Manager at Rio Health, commented: “The high demand particularly for vitamin D, vitamin C and multivitamin products last year made it a challenge to keep up with demand. Currently there is better balance between supply and demand, and, at Rio Health, we currently have good levels of stock for these products. We have also decided to increase products of these types within our ranges. A new dry liposomal vitamin D3/K2 with magnesium should be arriving soon and will mean the epigenar range will include six liposomal products. We also have new botanical tinctures specific to respiratory health, including Organic Inula and Organic Ezov.”
Rose Holmes, Education & Training Manager at Rio Health, added: “As we would expect, sales of vitamin D have a seasonal element, being highest between October through to the end of March as these are the months where, in the Northern Hemisphere, there is greatest need for supplementation of this essential vitamin. This year, sales of vitamin D remain high, even outside the winter months. We are continuing to see a lot of interest in our herbal teas and energy products are currently quite popular; sales of yerba mate and guarana are high, with our Jungle Elixir (guarana shot) particularly high.”
Rose also noted trends in terms of shoppers seeking more information. “We notice that the public have more questions about products, uses and benefits,” she commented. “Of course, health claims legislation dictates what can be said by us to members of the public about products in our ranges. At Rio Health, we often suggest individuals contact a healthcare provider or seek out a practitioner working in their local health store for personalised guidance.” So to the challenges that have been experienced by suppliers and whether this picture is changing.
“The challenges Au Naturel UK is facing aren’t really connected to the UK reopening. Instead, we’re facing the global challenge of getting the raw materials that are needed to make many of our products over in the US, meaning we do have some products out of stock. Raw material supply to the US has been heavily impacted by lack of farming, workers and flights all due to Covid-19 issues,” Martin reported.
And Colin added: “Perhaps one of the biggest challenges relates to exhibitions. Those that have happened over the entire pandemic period have all been virtual. Exhibitions look set to resume in September and we do very much look forward to being able to safely meet retailers and practitioners face to face once again. In the meantime, our practitioner registration scheme has been popular; large numbers have registered and regularly access webinars and referenced product datasheets online.”
Looking ahead to expected trading patterns for the rest of the year can be difficult, given the turbulent time we have had, but there are certain forecasts that brands are making.
“As a supplier and from a retail perspective, I think we’ll continue to do well and flourish, but it’s worth being mindful that this growth is only taking us back to the level we were at 18 months ago, not exceeding it yet. I believe it will be 2022 before we grow past pre-Covid trade levels,” Martin commented.
“For suppliers, there is little to adapt to, save finding ways to better support the retailers that we supply too. I think that more retailers will turn to online and local delivery, but they will also need to find ways to tackle the much-reduced footfall into stores, as a result of people shopping online more. Retailers are now thinking about ways to get people back into stores, such as click and collect, stocking unique products and altering their product mix to increase the average basket spend.”
Colin went on: “We expect to see high sales of vitamin D and vitamin C products as we approach the autumn and through the winter months, and we expect an interest in botanical support for respiratory health, which is why we added Inula and Hyssop (Ezov), two new organic tinctures with properties beneficial for respiratory health.
“As the UK opens up, we very much hope to see normalisation of business with retailers and wholesalers and will help and support retailers with product information, samples and in other ways. We encourage these businesses to further the knowledge of their staff, thus improving the services on offer; practitioners working in a retail setting are warmly invited to register with us for access to referenced product datasheets and educational webinars.”