With reports of footfall improving, and general retail sales being brisk, could we be heading to a more regular trading pattern? Industry discusses the importance of being active in its recovery plans.
‘Promising signs but not out of the woods’ is not only how the British Retail Consortium (BRC) has described the last month of trade, but perhaps a phrase that best epitomises where the high street is at the moment.
On the one hand, we have seen sales rise generally in retail, and also anecdotally, speaking to health food stores, we’re hearing reports that targets are beginning to be met and footfall is returning now the high street has fully reopened. But on the other side, having had a high street that has pretty much been closed for the best part of a year, recovery is going to take time – not to mention action on the part of retail, especially to pull back those shoppers who have transitioned to buying online.
Let’s start with the data; the BRC reports that as 2020 was a turbulent year in which much of retail bounced between being open and closed, significantly impacting sales and the ability to make meaningful comparisons, all 2021 figures are compared with 2019 (pre-pandemic). This means 2021 figures are now year-on-two-years (Yo2Y), rather than year-on-year (YoY).
Covering the four weeks April 4-May 1, 2021, on a total sales basis, sales increased considerably over in the period following reopening and by 7.3 per cent across the month of April compared to April 2019. This is above the three-month average growth of six per cent.
Commenting on the data, Helen Dickinson OBE, Chief Executive, said: “Following the reopening of so-called nonessential stores on April 12 in England and Wales and continued online growth, retail sales enjoyed a welcome boost last month. With the short-term pent-up demand for the shopping experience drawing consumers back to stores, non-food sales across stores
and online increased by a quarter between March and April. It is great to see customers feeling confident visiting shops, a testament to the ongoing investment by retailers in making their stores, warehouses, and deliveries Covid secure.
“However, this sales growth is fragile. There is little competition for share of spending while parts of hospitality, leisure and tourism remain restricted and inner cities and town centres continue to perform poorly as many people continue to work from home. While the boost in sales is positive as the industry continues to invest in safety and the online offer, high streets still have a long way to go on the path to recovery.
“There are 530,000 people who work in retail still on furlough. This and the end of the full business rates relief in England in June jeopardises the future of many stores and the livelihoods of those who depend on them. The Government must deliver on its promise to reform the broken rates system in their ongoing review and reduce the financial burden on retailers, or risk more unnecessary store closures and job losses.”
Paul Martin, UK Head of Retail at KPMG, added: “Retailers will be delighted with the way the reopening of the high street was greeted by shoppers eager to get into stores and engage once more with physical shopping. Remembering that this time last year we were in lockdown, there are some outstanding growth figures in April, especially in non-food within categories such as jewellery, accessories and footwear, which all registered triple digit growth.
“Online sales continued to grow across most categories, but at a reduced rate as many consumers stepped away from their computers to head outside. This maybe has come as a surprise, although it does showcase that some changes in consumer behaviour are here to stay. Conditions will remain challenging as Government support tails away over the summer and interest and repayments on CBILS and bounce back loans will need to start being paid back, alongside deferred rental payments.
Retailers face an interesting few months as they assess the level at which online shopping falls back and full re-opening of the hospitality sector will likely see a dilution in retail spend in favour of leisure, entertainment and hospitality. Retailers will be hoping that with the increasing positive signs of the economy improving, market conditions offer scope to spark a big surge in consumer spending this summer.”
Susan Barratt, CEO at IGD, went on: “Inevitably, food and drink will settle at a reduced rate of growth as the competitive landscape normalises but also as the tough lockdown comparatives from 2020 persist for the next few months. The easing of lockdown restrictions coupled with thereduced threat of Covid-19 has helped push IGD’s Shopper Confidence Index to its highest level in five years. This will likely be boosted over the summer as the economy opens further, which will be good for retail and foodservice.”
The British Independent Retailers Association (Bira) has also added its concerns in terms of recovery, saying it is disappointed over delays in distribution of Restart Grants.
The one-off grants of between £2,667 to £6,000, which were announced in the Budget in March, were made available to help non-essential businesses reopen after lockdown ended on April 12. However, many members have told Bira that the money – distributed by local authorities – has not yet been received.
Andrew Goodacre, Bira CEO, commented: “We are disappointed to hear from members that there are ongoing delays with the distribution of the Restart Grants. In our view, these should have been with business owners before the shops opened and now we are in May and still too many independent retailers are waiting.
“All the data is with the local authorities as this is not the first time grants have been sent to businesses and we urge all local authorities to re-double their efforts. Shops may be open, but the owners still need all the support that is owed to them.”
High street support
Retailers in this sector have remained open, but this has presented its own challenges for stores, including reduced footfall and having to invest in making stores Covid secure so they could open. This amid a rising tide of online shopping. But as difficult as this period has been, there are positive pockets in our industry.
Alan Martin is the owner of two Food for Thought stores in Kingston and Guildford, and Olivers, in Kew, and has continued to plan and make the stores an appealing place to shop in the same way he would prior to the pandemic.
“We are spending money to enhance the coffee bar over the next month. Sales and growth there have been phenomenal and we are both confident and optimistic we can drive the business way beyond where we are today. We also have plans to put in a mini coffee/juice/smoothie offering in the Kingston store over the next few weeks. There are opportunities up for grabs. Suppliers seem confident too. I have met with a few to discuss plans and there is excitement in the air; if we can all work together over the coming months, we can strengthen all our businesses.”
But it’s not just future planning – activity has been busy throughout the period for Alan.
“We have had two major campaigns this year. In January, we launched our GET FIT initiative, via our in-house magazine, Peeled & Revealed. We teamed up with three gyms (one local to each of the stores), to provide free online/Zoom classes for our customers. We included three weeks of meal plans within the 28-page magazine, our ‘Re-Set Meal Plan’ to get people moving and eating well after the Christmas break. Uptake on this was strong and we received a lot of positive feedback,” he explained.
“We launched our second campaign for April 12 when the lockdown eased. Again, using Peeled & Revealed, we produced an interactive stress and anxiety colouring-in issue! Feedback so far has been fantastic, we have really struck a chord with customers.”
And Martha Brennan, from Harvest Fare, in Blessington, County Wicklow, pointed out: “There isn’t a one solution fit for all for shops, so each retailer is looking at the changing trends specific to their business and building in plans to maximise the potential. Health food stores are cemented in the hearts and minds of the public as essential to securing a
healthy future. Now there’s a platform that’s worth building from.
“It is vital that we build a feeling of confidence and positivity for customers. It is also important to embrace the focus that lockdown trading brought to shopping
local and supporting community-based business. Health food stores have always been at the heart of communities and we need to demonstrate this now by how we present our business both in-store and online.”
Suzan Turan, owner of The Aquarian Health Store, in County Kerry, added: “I’m always working on improvements of my business so it’s not a new concept for me. What works will stay, that which doesn’t will stop. I have had fantastic business mentoring for more than five years and that’s why I am confident and not afraid of whatever will come along.”
But given it’s been such a trying time, why does Alan think such activities are so important?
“Initiatives and events have always been part of what we do, however, it has been important for us to find new ways to do what we do so that customers see a continuity in what goes on in our stores. That is really important for us,” he explained.
“I was surprised by being presented with an award from a local charity for the services we have provided to the local community over the past year. That made me happy – we do what we do because it’s what we do but it makes you stop and think when someone actually thanks you for being there.”
Looking at trade generally, in the UK, trends appear much more stable, with more scope to forecast.
Alan commented: “It is generally much more settled this year compared to this time in 2020. We were still feeling our way through the first lockdown, there was more uncertainty and I think much more fear and anxiety. There was a marked increase in the number of home deliveries made last year compared to very few now. Footfall is down 40 per cent on average
year on year but customer spend is up considerably. Demand for the additional categories we introduced during lockdown one has not diminished, in fact, if anything, we have seen growth in fruit and veg, alcohol, fish, meat and dairy.
“Up until April 12, we had felt the effects of lack of footfall in our two town centre stores (Guildford and Kingston) but trading was well up, 20 per cent or so year on year at Olivers, our Kew store. Interestingly, as the non-essentials, hairdressers, beauty parlours and gyms reopened on the 12th, sales increased dramatically in Guildford and Kingston
but fell away slightly at Kew. It was as we had predicted. Our coffee bar has seen the biggest growth during the past year at over 100-plus per cent. We have also seen a
steady increase in VMS, skincare, make-up and sports nutrition since lockdown eased on April 12.”
Over in Ireland, lockdown has been different, with restrictions lifting at a different rate to the UK.
Martha commented: “Restrictions are thankfully easing, and Irish retailers are welcoming back their neighbouring shopkeepers and service providers. This will no doubt boost footfall in many city centre locations but, more importantly, it will have a confidence boosting effect for shopping in general. We should expect that many safety measures practiced throughout the pandemic will remain in place until there is a global emergence from the pandemic that is ratified by the WHO.
“The key difference is the lack of panic buying. People are shopping in a controlled and purposeful manner. While in many ways it is similar to trading through the initial phase of the lockdown, the key difference would be an acceptance of the safety measures by most people, which helps with a more relaxed feeling while people are shopping. The ethical and support local aspect to shopping is holding firm and we need to foster this change too.”
Suzan added: “We have had it rough for a long, long time. It looks like there may be some eased restrictions, but you can never really rely on that in Ireland. Brexit has left
us with 30-40 per cent out of stocks since January in key lines. Slowly, continental brands are filtering through thankfully.
“It has been a very busy year, with high footfall. Shoppers are looking for quality products, good food and flavours and also a relaxed atmosphere without the fear while, of course, observing all physical distancing and other guidelines. It was difficult to find quality staff but now I have succeeded.”
If we take a closer look at products that are in demand, the trends are perhaps not much of a surprise.
Martha advised: “Stress, sleep and mood balance relating to lockdown and pandemic restrictions continue to be the dominant issues, but a return to seasonal factors like skin protection, hay fever, and exam stress is signalling a return to more predictable trading patterns.”
And for the future? Alan doesn’t believe it will take long for more normality, commenting: “I am really optimistic. If all goes to plan and restrictions are fully lifted by June 21, then I think we will have a cracking second half of the year. We have to plan for that being so and move ahead accordingly.”
But Martha went on: “I do not think there will be a resumption to normality. Changes in shopping habits only take a matter of weeks. Having traded though 18 months of enforced change, it’s a matter of accepting that habits have changed and recognising these changes to build on the positive aspects.”
Suzan added: “That’s anyone’s guess I’d say. We’ll have to be flexible, very closely watching and ready to change course as it appears.”
So, what of the growth in online? How important will it be for retailers in this trade to adapt?
“Tread carefully – Amazon wasn’t built in a day,” Martha commented. “Adapt a strategy and scale that works for you. In person, customers will not want to deal with a distracted owner or staff member with one eye on the clock for the post office deadline or a pinging tablet on the counter distracting them.
“There are various platforms and strategies that can be used to accommodate customers not present, everything from WhatsApp messages to Facebook shop pages. Find the one that allows you to stay comfortable within your shop and build a sustainable bolt on that does not distract you from your core business. If you already have a bells and whistles website, then avail of the government supports to enhance its usability and visibility to compete with the online giants.”
Suzan went on: “My website offers a glimpse at who we are. I only offer very specialised product online and have no intention of increasing the online store. We’re a high street and people business. Hopefully, people will realise the importance of their town centres – only time will tell.”
And Alan added: “We have debated the online issue many times, personally, I don’t think it will amount to anything for us. We are too busy welcoming customers to our stores, getting involved locally and collaborating with suppliers, other retailers and businesses. For me, the future is more of that! I find no joy ordering online, I love interaction. We have spent a year deprived of human contact; I want to see the high street buzzing again with life!”
Away from this trade, there has been good news for high streets generally, with the Government announcing a further 57 English high streets will receive a share of over £830m as part of the Future High Streets Fund to improve transport links, build new homes and transform underused spaces to help them reopen and recover from the pandemic. The funding is part of
the Government’s plan to protect, support and create thousands of jobs in a range of industries, delivering opportunities and prosperity to communities across England.
Confirmed plans include £17.28m for Grimsby to create a new multiplex cinema and market food hall, which hopes to boost visitor numbers to the town centre, and £6.28m for Sutton-in-Ashfield for the refurbishment of the Sutton Academy theatre space and repurposing of vacant retail space into offices and hospitality venues. A new pop-up food and events
space, as well as better pedestrian links, will encourage more local people to visit the town centre for special events and festivals.
Communities Secretary, Robert Jenrick MP, commented: “This investment will make a huge difference to towns and cities across England and transform themselves in desired places to shop, visit, live and work. The Future High Streets Fund will support towns, communities and businesses as we get back to enjoying the best of what the high street has to offer.”
a huge difference to towns and cities across England and transform themselves in desired places to shop, visit, live and work. The Future High Streets Fund will support towns, communities and businesses as we get back to enjoying the best of what the high street has to offer.”
Sarah Orrechia, founder of the supplement brand, Unbeelievable Health, commented: “2020 was a brilliant year for us, we make supplements for immunity, energy, stress and sleep – all areas people needed help with. In 2021, since the vaccine rollout, we’ve seen sales slow a bit with the immune supplements. Also, I think people might be feeling the financial
pinch, as other supplement brand owners I know have told me their sales have slowed. People spent a lot on supplements in 2020!
“With so much demand for supplements, our manufacturing times increased from two to three months to five to six months! With Brexit, it’s also going to be harder and more costly to get ingredients from the EU, where some of our key suppliers are. Also, forecasting has been difficult.”
But she added: “One of the silver linings is more people are starting to care about their health and wellbeing. The public has become far more educated on health and wellness over this period and far more people are taking supplements and natural remedies than before, which is great news for the natural health trade.”
Sue Harrison, Head of UK Sales at Mahi Naturals, which has brands in its portfolio including Hope’s Relief, Woobamboo and Emani, added: “Sales of products to help relieve skin issues like Hope’s Relief has surged and there has been growth over all brands. Customers are far more ingredient aware and looking for products that are chemical free, natural and eco-friendly in all areas of home and body care. Customers are seeking quality and economy so brands like JR Liggett’s solid shampoo bars and conditioner are selling well. BioKap has really grown during lockdown as no one could have their hair coloured unless they did it themselves at home or lucky enough to live with a hairdresser!”
However, she added: “The cost of importing goods and freight charges are still very high and charges that we need to absorb as a business as we have not increased our product prices. Luckily, we have not seen any delays and supply of goods to the trade has been steady and uninterrupted.”
Certain health areas remain in demand, perhaps a symptom of the toll the pandemic has taken on people’s health.
Sarah added: “We seem to be selling a lot more of our Bee Calm stress/anxiety supplement and Bee Energised – I think many people are anxious and feeling drained and nutritionists we work with have confirmed this. I think energy supplements will be big in 2021, especially with those who suffered from Covid.”
And how different are the trends now compared to a year ago at the height of lockdown?
Sarah commented: “There was such a clamour for immune supplements, we sold out and had to increase production. It’s tapered off, but just because one has had the vaccine, it doesn’t mean we should stop supporting our immune system. A healthy immune system always gives one an edge. Last month, stores were definitely buying a variety of products to stock up their shelves again, but as there are still limitations to customers in stores, and the footfall has not really changed yet, we anticipate a gradual increase in stores replenishing.”
Sue went on: “We have recently acquired a fantastic new brand, Dr Jacob’s Naturals, and already taking pre-orders awaiting its imminent launch. We have planned excellent promotions for all our brands to not only encourage retailers but also help promote them to the customers. As much as e love to have the shelf space, we also are fully active in marketing and promotional support to help the stores sell the products and have happy customers. We are also growing our own brand of natural skincare, SkinWorks, and have a new Multivitamin
Serum launching in the next few months.”
And what are the realistic expectations of the future for suppliers and product demand?
“I suspect another year, although the trend of buying online has grown, shops ought to set up to sell online if they don’t already, just to have that option,” Sarah commented. “These times are definitely uncertain and there have been so many new supplement companies launch. We have expanded our social media marketing and we will also continue to work on NPD.”
Sue added: “Customers have changed their shopping habits and it will take a while for this to adapt again, especially as the restrictions are changing and differ across the UK and Ireland. Retailers are still very cautious about ordering stock, so shelves are still sparse in many stores and customers are not getting the usual full selection. It is likely to be several months still, and once office workers go back, the central stores will have footfall resume.
“We have a very positive outlook for the future, growing as a company, with a fantastic and experienced team. Our number of stockists is ever increasing, and our existing stockists are expanding the ranges and taking on our new brands.”
She added: “We offer fast delivery with low minimum orders and, as we have multiple brands, this can be spread over all our products so we are looking to grow our direct sales as well as our wholesalers, to ensure we can reach all our customers and fully support our retailers. We are really looking forward to being able to meet everyone at the trade shows when they can finally go ahead.”