With the vaccination programme rolling out at pace, and cases falling, could we be seeing the beginning of the end when it comes to lockdown life? Experts across the health food industry discuss what the imminent future may look like, and the road ahead to recovery.
The stark reality of the ongoing third lockdown was demonstrated with a recent British Retail Consortium (BRC) statement calling for further action to help businesses down the road of recovery.
At the time of Health Food Business going to press, we were awaiting Boris Johnson’s roadmap as to how we would move out of lockdown, but in the meantime, the BRC revealed the struggles that are set to face retailers as we move into some kind of new normal, not to mention the action needed to help support small businesses to build forward in a positive way.
The BRC revealed that 2020 was the worst year on record for retail sales growth, with in-store non-food declining by 24 per cent compared with 2019. These results have also been reflected in footfall, which was down over 40 per cent in 2020. After some retailers embraced rapid increases in demand, others found their doors closed for the third time at the end of last year. The BRC calculates that the three lockdowns cost non-food stores – mainly ‘non-essential’ retail – an estimated £22bn in lost sales. Furthermore, tighter restrictions in the crucial run-up to Christmas hampered retailers’ ability to generate much-needed turnover, which would have helped power their recovery in 2021.
Retailers contributed £17bn in business taxes in 2019, collecting a further £46bn in VAT. Of course, this sector has remained open, with huge demand at certain times and some categories – organic as a good example – seeing huge rises. But in the main, we are still seeing health food retailers report lower footfall and unpredictable trading patterns.
With March 3 due to be the date the Chancellor unveils his Budget, there is hope he will extend support for small businesses as the hardest hit. Helen Dickinson OBE, Chief Executive at the British Retail Consortium, advised: “After 2020 proved to be the worst year on record, it is essential that the Chancellor uses the Spring Budget to support those businesses hardest hit by the pandemic.
Vital support in the form of an extension to the business rates relief and moratorium on debt enforcement, as well as removing state aid caps on Covid business grants, would relieve struggling businesses of bills they cannot currently pay and allow them to trade their way to recovery. “Tackling the challenge of rates, rents and grants should be the Government’s immediate priority to ensuring the survival and revival of non-essential retailers and protecting the jobs of hundreds of thousands of retail workers across the country. The investment we provide to retailers now will be repaid many times over through more jobs and greater tax revenues in the future.”
It’s undoubtedly been a trying time for retailers, not only with uncertainty but with the frequent changes in terms of what they need to remain compliant to stay open as an essential retailer. So, how are health stores managing with the ongoing third lockdown?
Melanie Beard owns four Best Health Food Shops with partner, Len Glenville, and commented: “Lockdown three has been tough on sales, mainly because of it spanning over January, which is usually a quiet month as everyone has spent all their money over Christmas. However, this time, people seem more used to things. There is no panic buying, hardly any uptake on deliveries and collections and just a steady but slower than usual trade. Customers just seem to be more fed up and frustrated at the ever-changing rules and restrictions.
“On the whole people feel comfortable coming out, however, mask wearing or more not wearing them has become much harder to deal with. People are still refusing to wear masks and we are juggling to keep everyone happy and safe whilst not putting the staff in a position where they are subject to abuse, which is always very hard. Customers have very vocal opinions about the pandemic, vaccines and masks and it is never easy to please everyone!
“We are constantly monitoring what we do to ensure that we are keeping up with the law but this is not always easy as the Government is not always clear so we do what we can but there will always be people who are upset by something so we just have to deal with these situations as best we can.”
Dean Hand, Manager at Sheaf Street Health Food Store, in Daventry, Northamptonshire, added: “We’ve split our staff into two bubbles, each bubble working a rolling five-day shift, which halves the chance of the whole team catching Covid.
Everyone wears masks, of course, we get through bucketloads of sanitiser, cleaning down on a rota. We have screens at the tills. Customers are required to wear masks and sanitise their hands when they arrive. Customers who are exempt from wearing masks are offered a time slot to come back when the store is empty of other customers (before opening hours), but this is a rarity.
“We’ve always had a call and collect service, and we added free deliveries (£10 minimum spend/10-mile radius) last spring, which has been popular. We’re also working with a local web company that is creating a website for the town (www.daventrytowncentre.com), which should enable us to dabble with online sales – we’re considering bundles of items around themes, rather than attempting to load the entire store, which would be impossible to maintain.”
But what effect has this prolonged third national lockdown had on trade? Lucia Browne, Business Development Manager at Inside Out Health, in Reigate, commented: “We were fortunate in being able to remain open, but we made the decision to close the door and work a collection and delivery service. Day one of the third lockdown, the town was empty – people were heeding the advice and we noticed an increase of click and collect orders, plus telephone advice and more demand for our home delivery service.
“We do find that regular customers are buying the same now as they did during the previous lockdown, but instead of buying two months of supplements at a time, they are now back to buying as needed as they have confidence in us managing a steady stock replenishment. There has definitely been an increase in people wanting more natural products, our bodycare and haircare ranges are in great demand, especially face and shower products.”
Melanie added: “We have tweaked and amended things over the last year in order to adapt to the ever-changing Government guidelines and to ensure the safety of staff and customers. We have also continued to grow so have introduced new product ranges to keep up with demand such as fresh and frozen fruit and veg, freshly baked bread etc. We have also done what we can to increase our local product offering to support other local businesses and continued to locally advertise to continue supporting smaller magazines and organisations. We are still working on our website, which is coming soon!”
And product wise, are we still seeing demand similar to the original lockdown?
“Customers are more anxious and immune-boosters are still in great demand. Most customers are saying they plan to get vaccinated now, whereas they seemed more negative about vaccines before Christmas,” Dean reported.
“Huge increases in the immune boosters, anxiety and mood supplements, but also lots more gifts and greeting cards. We haven’t seen as big a surge in baking goods as we saw in March/April 2020. The supermarkets seem to have managed to keep flour on their shelves. Last year, we delivered around five tonnes of flour to local customers and approximately 300 packs of dried yeast!”
Melanie continued: “Things have certainly plateaued and we have found buying patterns have normalised on the whole. There is still good demand for immune boosting products and especially vitamin D, but it is not huge spikes. I think people are now used to lockdowns, they know that shops will remain open and that there is plenty of stock to go round so their shopping habits are just calmer all round.”
And although we may be heading towards the spring, we also heard from retailers about how Christmas trade fared.
“Christmas was unpredictable, as most of the year has been. Overall, it was quieter than usual, with reduced footfall and local restrictions causing the usual issues. The previous theme of home baking – as people have spare time on their hands – seemed to run through the Christmas period and the surprise trend for us was gingerbread house making kits! We ordered some back in June, just because we liked the look of them but were certainly not expecting to be that popular,” Melanie commented.
“We could not sell them quick enough and they seemed to become the toilet roll of the Christmas season, with people desperate to get their hands on them! I am sure that if we bought in extra for next year, they won’t be nearly as popular – you just can’t odds it!”
Kate Segal, owner of Inside Out Health, continued: “I think we did benefit from other shops being shut in November and so had more browsing customers and therefore more impromptu sales. Overall, as people weren’t gathering with family and there was less seasonal spirit as the town was mainly closed and due to the situation with the rise in numbers in hospital, the mood was more subdued understandably and we didn’t feel it appropriate to make too much of the season, although we did get my husband to dress up as Santa for the deliveries in the last week before Christmas, which was popular, and we had orders specifically so that customer’s children could get to see Santa!”
Lucia added: “We weren’t sure how the Christmas season would pan out, like many shops, we were still getting our heads around new working processes and Christmas crept up on us! We were very dubious about placing large stock orders, so went cautiously, ordering maybe two thirds of the stock we did based on the previous year. We were pleasantly surprised to see people planning ahead too, and much of the stock started moving almost immediately. Small gifts and stocking fillers were especially popular from September onwards. We also had an increased demand for pre-made foods.
The usual influx of bakers around early November was slower and there was definitely more favour towards premade goods – especially gluten-free and vegan.” Dean added that it was all about gifts: “Footfall is always unpredictable in retail, but even more so during the pandemic. Overall, our Christmas trade was up. Sadly, many of the lovely gift shops in Daventry have been closed due to Covid, and everyone was looking for presents they could buy without leaving the town.
“We sourced metre-long hot water bottles, aromatherapy necklaces, crystals, recycled greetings cards, organic clothing, gift sets from our ethical beauty suppliers, and all the Christmas foods you’d expect. The gift offering brought in a good number of customers we had never met before. Interestingly, many of these items are still selling well.”
And in terms of confidence in shopping and a general return to the high street? Dean advised: “There are definitely less customers, but they are spending more when they come in. There is a nervousness, and everyone is careful to keep their distance while shopping. But they are also so pleased and relieved to chat with someone and get away from their own four walls.” Lucia went on: “We are encouraging people to stay home as much as possible, and really driving our free home delivery service. We do offer for people to collect at the front door (and this is very popular, especially for people who want things the same day, or fresh products). I would say that many of our regulars in store aren’t going out too much, and the high street in general is much quieter than, say, a normal ‘pre-Covid’ day.
“There are a number of coffee shops and eateries offering takeaway in close proximity to us who do draw the crowds but on the whole, people are very respectful of social distancing and on occasion, we have had passers-by wanting to buy something at the door. We have seen an increase in our online sales, which suggest that people are staying home more but of course this is just a tiny viewpoint we have of the market.
Turning negatives into positives
We must also remember that not all elements of the pandemic have been negative, and anecdotally, many retailers report being able to focus more on strategy for the future.
Kate advised there would be definitely be elements they retain: “Lucia has given us an e-commerce site, which is looking
great and now producing regular orders so that has been something we have wanted to do and this situation has given
us the impetus to do it. Deliveries I am sure we will continue and click and collect so basically all options will remain open
for customers to use.”
And Lucia added: “Our collection service, and free home delivery service were well received throughout each lockdown and having spent some time honing our procedures in store, we are now working in the style of a warehouse, rather than a shop! Adapting our processes to suit the needs of the customer has been easy – we offer a personal service to everyone, the same as they would receive if they came into store.
“We offer nutritional therapy check-ins by phone or Zoom, as well as our Beauty Chat sessions and give each customer time to do their shopping by phone too, just like a personal shopping experience. The feedback has been amazing, and we are so grateful to the customers that have ordered regularly through the year. I would say our click and collect system has been the most popular, but we have been able to fulfil home deliveries in the local area over three days a week, every week through lockdown.”
And Melanie went on: “We are definitely looking into the possibility of continuing to offer local delivery – but this is something that needs working on as a big project to see if it will be cost effective and that it is something that people want.
It may be that after all this, people want to just come out and shop again! Also, once the website is live, this will mean we can offer mail order too.
“The only other thing is Zoom product training we have been able to offer as reps are not able to come in store. This has proved hugely popular and useful and whilst we miss having people in store, I think that we would keep future product training online as it is just much easier and accessible for the staff.”
What is clear is trade is hard to predict now and returning to the former ‘normal’ is almost impossible to forecast. “I don’t think things will ever be ‘normal’ again. We’re all now brutally aware of how vulnerable we are. The common wearing of face masks is likely to continue for perhaps years to come. People will avoid crowds and will looks for deliveries and pick-up services for many items. But we also miss connection, so stores that ensure they work safely, will still have plenty of custom,” Dean commented.
Kate continued: “I hope that when we can come out of lockdown, that business will pick up as it started to after the first lockdown and I don’t doubt that will happen, it just depends when we can lift the lockdown. I am hoping for a good second half of the year. “I think it will take another year for things to resume normally but that is not to say business can’t do well in that time, providing we follow the rules needed and take opportunity to find sales through our website and click and collect and delivery service too. I think as a team of nutritional therapists, it will be a chance to educate our customers on looking after their health and the role of supplements in supporting that to protect us in the future.”
And Melanie pointed out: “The last year has taught us to have no expectations as there is just no point in trying to forward plan or try and figure out what sales might do as we have been wrong so far every time. We can only hope that things start
to normalise, and the high street picks up. We are also hoping that the Budget this year is mindful of small business and retail as it tries to recover, which will take time and support. There is talk that the Government is looking to increase corporation tax for small business, reinstate business rates in April and increase living wage again – all of which, should it come into place, is just another nail in the coffin for any small business trying to rebuild and move forward.
“We have been lucky to be able to stay open and we are always looking to grow and expand still as we believe that standing still is the worst thing we can do. So, we just carry on as normal and keep going with developing the stores, finding new brands and product ranges, as well as still looking for new stores to add to our brand!”
She continued: “I think that some normality for the day to day will not really happen until next year. We are already looking at lockdown going on until March and if we look at what happened last year after the summer easing of lockdown, we could just be repeating history. Obviously, we would hope that the latter part of this year will bring some normality, but it will be a slow turn around. Who knows what the future holds, but the health food industry is resilient and has been through hard times before, so we keep on fighting!”
To read the full article, visit https://www.healthfoodbusiness.co.uk/imag/hfbmar21/index.html?page=18
*This article was originally published in the March 2021 issue of Health Food Business magazine. Statistics were correct at the time of publication.