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The Office for National Statistics (ONS) on Friday, 24th April 2020 announced the first estimate for retail sales in Great Britain for the three months ended March 2020. It was reported that for the month ended March 2020, the monthly retail sales volume was down by approximately 5.1 per cent. Despite the blues of the beginning of 2020 for the retail sector, this was the worst performance from the sector in terms of sales volume. The sharp decline was primarily driven by the fact that the stores and showrooms across the country, except the retailers of essential items, had to be closed, adhering the government’s announcement regarding the imposition of a lockdown in the country, to stop the spread of the Covid-19 pandemic within the country.
(Source: Office for National Statistics)
The key driver behind this fall was the sharp decline in the clothing and fashion retail items, which, for the month of March 2020, fell by approximately by 34.8 per cent as compared to the previous month. Fashion retailers in the country had gone through multiple problems during the last few months, and the covid-19 pandemic has brought an additional number of challenges for these retailers, especially for the ones who failed to move their business operations online, leading to a steeper fall in sales in terms of both value as well as volume.
After the UK government’s announcement for the imposition of restriction in the country on 23rd March 2020, retail stores had to be completely closed, even though some retailers were allowed to operate online. This led to a situation wherein many non-essential types of stores temporarily stopped selling in order to reduce gatherings and virus transmission. It was the period between March 1 to April 4, 2020, which had been included in the reporting. This was the period when the government the delay phase of the response to coronavirus was under implementation. Meaning that the two weeks of the five-week trading period were included in that, which influenced various formats of main stores.
While trade continued for important types of business, including grocery outlets, customers increased their purchases in these outlets, with a month-to-month difference of 3.9 and 4.0 percentage points respectively for value and volume sales. In comparison, non-food stores have seen a sharp decrease in value of around 7.8 per cent and a fall of 8.0 per cent in terms of volume. In addition, the travel curbs caused a decrease in fuel sales for the month of March, of 2.3 in value and a fall of 2.0 percentage points in volume, respectively.
It is believed that the results for the month of April would be the same, if not worse as the restrictions have been imposed for a much longer period during the month of April, and is expected to go even longer, given the status of the Covid-19 pandemic within the country.
Retail firms looking to make a comeback
With a significant loss of revenue during the last couple of months, retail firms are looking to restart their business activities as soon as possible. The production arms of Mulberry and John Lewis have decided to reopen their factories and manufacturing facilities, in order to start designing and producing products for the NHS staff and front-end workers for their fight against the Covid-19 Pandemic.
On 26th April 2020, John Lewis announced that it would kickstart one of its textile production facility in the county of Lancashire that will be utilised to make 8,000 gown for clinical purposes to support the medical staff present in the hospitals and nursing homes and treating the patients that have been infected with this coronavirus. It has been reported that this manufacturing facility primarily makes curtains and pillows that are later sold by the company through its retail stores. This was announced by the company when it was being reported that there’s a severe shortage of protective equipment for the medical staff, and especially with the protective equipment that is made from the a specific type of a process which is, non-woven, spun-bond, laminate called SMMS which the company has expertise in and will use.
It has previously also been reported that due to the shortage in a number of medical equipment as well as the personal protective equipment, the NHS and the hospitals in the country have turned towards the industry to seek their help. The industry, in turn, has responded by producing medical products, such as ventilators being produced by airline and automobile engine manufacturers, as their operations were halted due to the lockdown. British Handbags manufacturer Mulberry, on 24th April 2020, also announced that it would start producing additional PPE equipment, especially gowns for the NHS Staff. The company is focusing on producing gowns, as per the requirements laid out by the government, that can also be laundered or washed and reused, which allows the staff to have more resources at their disposal.
After the ONS report on the decline in retail sales, as well as Office For Budget Responsibility’s research that the British economy could contract by around 35 per cent in the second quarter, the British Retail Consortium announced a new set of guidelines for the retailers to restart their activities in the UK, in case the government announces an easing of the Lockdown. The guidelines from BRC include the following:
- Providing hand sanitisers for customers
- Encouraging customers to visit shops alone
- Limiting the number of customers in shops at one time
- Encouraging cashless payments
- Keeping customers 2 metres apart
The BRC recently also updated on the latest steps being taken by a number of retailers to support the government as well as the NHS in a bid to fight and drive out the challenges being presented by the Covid-19 pandemic in the United Kingdom. Some of the steps being taken by certain retailers include the following:
- Morrisons announces a 5 per cent discount to its 2,700 farmers to say thank you. Registered farmers including livestock suppliers who supply Morrisons with lamb, beef and pork; egg farmers who directly supply Morrisons; dairy farmers with a Morrisons contract; and fruit and vegetable farmers who directly supply Morrisons.
- Marks & Spencer launched a collection of 'All in this Together' t-shirts, which were their fastest ever to sell T-shirt. There will be more t-shirts this week with all the proceeds going to NHS Charities Together.
- Sainsburys extended opening hours. Most stores will be open from 08:00 A.M to 10:00 P.M from 27th March 2020, and there will be other convenience stores of the company that would remain open till about 11:00 P.M. Before shopping, the customers have been advised to check the new opening times in their local areas. The company is also installing Perspex protective screens in its gasoline filling station shops, at the start of this week in anticipation to reopen.
