Simba reaches £100m sales in exhausting year

Simba also delivered £3 million EBITDA profit during the period.  Total digital sales grew by 65 per cent in 2020, which accounted for 97 per cent of total sales compared to 84 per cent in 2019.  Simba said it achieved record sales throughout the last three quarters including sales growth of 35 per cent in the second quarter, 70 per cent in the third quarter, and 125 per cent in the fourth quarter.  The retailer said it had joined the BRC’s Climate Roadmap initiative in the fourth quarter, aiming to become net zero contributor to greenhouse emissions.  “Like many businesses reacting to the Covid-19 crisis, our first priority was our team, both internally, and across our supply chain and distribution partners; ensuring their safety whilst we put plans in place to continue to trade responsibly,” Simba chief executive Steve Reid said.  “In what has been an exhausting whilst exhilarating year, thanks to the unwavering support and hard work of the team, our now leaner ecommerce focused business model puts us in a position to deliver what we expect to be double digit EBITDA in coming years.  “Simba has delivered a remarkable turnaround in the last 18 months. The firm has moved from making a significant loss, to a business that is now consistently profitable, whilst delivering all time high revenues throughout 2020 despite the challenges of a global pandemic.  “To have swung a bottom line loss and to be up above historic high revenues in just a year and a half is testament to the team here at Simba and our partners – which we are eternally grateful for.  “Data from our consumer sleep app reveals people have really wrestled with their sleep during the pandemic, so this upturn could be a reflection of people searching for self-care solutions at a time when anxiety around Covid-19 is causing a plethora of sleep issues.  “Since launch there has been speculation surrounding the online mattress business model, but this year has proved it can weather even the heaviest of storms.  “Sustained sales growth throughout 2020 has crucially been underpinned with continued profitability, validating that it’s not only robust, but sustainable.  “Four years on, both the business and sector have matured exponentially – rooted in genuine product innovation and consistently evaluating and evolving business practices.”

 

Pure Electric calls for government grant to help retirees buy bikes

Pure Electric has called on the UK Government to subsidise cycling equipment for around a million pensioners as part of a new proposal it says would get the elderly exercising more.  The electric bicycle retailer said that a government-backed 20 per cent discount on bikes for the over-65s, and an up-front loan for the remaining 80 per cent, would help some of the six million over-55s who are currently classed as “inactive”.  Pure Electric estimates that around one million pensioners would take part in the scheme over four years if it was adopted by the government.  They would apply for a voucher for the full cost of the bicycle equipment up front, and the Treasury would recoup four fifths of the cost by deducting the money from the state pension.  The scheme would cost around £1 billion up front, but with £800 million recouped over the years.  “The pandemic has highlighted the benefits of regular exercise and cleaner air,” Pure Electric chief executive Peter Kimberley said.  “We understand the Treasury is under considerable pressure, but this money might make the difference between the elderly deciding to stay in or taking up a new activity.”  It would mirror a similar scheme that has run for the last 20 years which encourages employers to help their staff buy bikes.  “Cycle to Work has been so successful over the past two decades, and now’s the perfect time, particularly given the new lockdown, to build on that by targeting the 12 million over 65s who aren’t in work and can’t qualify for it,” Kimberley said.  “It doesn’t seem fair that working age people have been able to access Government support to enjoy the benefits of cycling but retired people can’t.  “We’d love to see other bike retailers, sporting bodies, charities and MPs join with us and back this idea.”

Moonpig plans £1bn floatation

Moonpig has reportedly planned a £1 billion stock market flotation after the Covid-19 pandemic led to a rise in sales and profits.  The online greeting cards retailer appointed investment banks last autumn to help it evaluate options for the business.  Citi and JP Morgan are leading the listing, which will value the company at more than £1 billion, Sky News reported.  Moonpig’s owners Exponent Private Equity may announce in the next fortnight that the company will pursue an IPO in London.  During the first two months of the UK-wide lockdown, Moonpig said it added one million customers to its platform.  It also trades in the Netherlands under the Greetz brand.  Moonpig delivered 45 million cards in 2020 in the UK and the Netherlands, bought by 12 million customers, with the UK market representing around two-thirds of its business.  A flotation of Moonpig would entail a return to the stock market for Kate Swann, the former WHSmith and SSP Group chief executive.

 

British Land says more than half December retail rent missing

British Land has managed to collect less than half of the rent it is due from retail tenants, as two-thirds of them were forced to close in January.  The property giant said it had collected 46 per cent of retail space rents by Thursday last week, seven days after they were due at the end of December.  The bills cover the last three months of the year, which were hit by both lockdown and the tier system that were implemented to slow the spread of Covid-19.  By Christmas Eve, restrictions were not as tight as they had been during November’s lockdown, and 73 per cent of British Land’s shops were operational at that point, it said.  Less than two weeks later, on January 7, only 620 stores, or 32 per cent, were able to trade in some way.  British Land reported “resilient” trading in the four weeks to Christmas.  Between November 30 and December 26, footfall was 76 per cent of last year’s level.  The firm also said it had noticed very little difference between sales in areas that were under Tiers 1 to 3 restrictions.  However, stores in Tier 4 had been hit, and were five percentage points lower.  In shops that remained open, sales were 81 per cent of last year’s levels.  In contrast, British Land said it collected 95 per cent of December rent from its office space portfolio, and expects to receive more in time.  It also previously collected 98 per cent of the March rent it was due, 99 per cent of June rent, and 99 per cent of September rent.  British Land’s notable retail assets includes Broadgate, Meadowhall and Ealing Broadway.

 

 

Donald Trump's tie -maker becomes latest bidder for Arcadia's assets

Donald Trump’s tie-maker G-III Apparel has reportedly become the latest bidder to buy assets such as Topshop and Dorothy Perkins from Sir Philip Green’s Arcadia Group.  G-III Apparel, which was involved in the Donald J Trump Signature Collection of silk ties, has emerged as a bidder in the auction of Arcadia, The Sunday Telegraph reported.  The New York-based retailer, led by chairman Morris Goldfarb, has joined fellow US retailer Authentic Brands as well as Boohoo and Next in the line-up to purchase Arcadia’s assets.  Green’s Arcadia collapsed into administration back in November 2020, which placed over 12,000 jobs at risk, with administrators at Deloitte now engaged in a search for buyers of its assets.  Deloitte has already struck a deal to sell the womenswear brand Evans to City Chic, an Australian fashion retailer.  Topshop is recognised as Arcadia’s flagship brand, and is expected to fetch more than £200 million from an auction that could conclude as soon as this month.  Last December, fashion retailer Next and Davidson Kempner Capital Management were revealed to be plotting a joint bid to gain control of Arcadia.  Between 30 and 40 potential buyers are believed to have initially shown interest. Deloitte is believed to be working towards a deadline at the end of February.  It remains unclear as to which parties are interested in which parts of the Arcadia empire.

 

 

B&Q & Screwfix owner Kingfisher enjoys surging Christmas sales

The boom in DIY showed no sign of slowing in the run-up to Christmas, according to B&Q and Screwfix parent company Kingfisher.  The firm, which also owns Castorama and Brico Depot in France, revealed that total sales soared in the 10 weeks to January 9, rising 16.9 per cent.  This was supported by online growth of more than 150 per cent compared with the same period a year ago.  Bosses said they were benefiting from bored householders looking to update their homes, while B&Q and Screwfix also enjoyed “essential” retail status in the UK.  This allowed its 1380 stores to remain open throughout the second English lockdown and subsequent tiering in the run-up to Christmas.  Sales in Kingfisher’s UK and Ireland market jumped 24 per cent in November, and were up 20.8 per cent in December.  The end of a national lockdown in France in December also saw a sharp spike as sales in the country, jumping 29.4 per cent compared with a 0.1 per cent fall in November on a like-for-like basis.  “While the strength of our Q4 trading, to date, is reassuring, uncertainty over Covid-19 and the impact of lockdown restrictions in most of our markets continue to limit our visibility,” Kingfisher chief executive Thierry Garnier said.  “Longer term, we are confident that the strategic and operational actions we are taking are building a strong foundation for sustainable long-term growth.  “We also believe that the renewed focus on homes is supportive for our markets.”  As a result of the strong sales, the boss added that he now expects pre-tax profits for the year to be at the top end of City expectations of £742 million.  This will include an £85 million one-off profit from the pandemic chaos after taking into consideration a £45 million spend on making stores Covid-secure and covering other coronavirus-related costs.  Kingfisher did not break out sales figures between its B&Q sites, which had to close showrooms but kept other areas open, and its click-and-collect business Screwfix.  However, bosses said they expect sales at Screwfix to hit £2 billion this year – just 15 years after the first store opened.  The company reiterated plans to repay money saved from the business rates holiday of £130 million.  It also repaid £23 million in November previously claimed under the UK furlough scheme and has made no further claims – including the Job Retention Bonus scheme.

 

M&S rescues Jaeger from administration but stores set to close

Marks & Spencer has bought upmarket fashion brand Jaeger out of administration, saving it from collapse.  However, M&S is expected to only buy Jaeger’s intellectual property, allowing it to sell Jaeger-branded goods on its website as a third-party brand.  The deal means no store staff from Jaeger are expected to keep their jobs and all physical sites – closed due to lockdown restrictions – are expected to stay shut permanently.  M&S did not disclose the amount paid but it is understood to be around £5 million.  Jaeger was placed into administration alongside sister brand Peacocks in November by now-former parent company Edinburgh Woollen Mill (EWM) Group, which is owned by Dubai-based tycoon Philip Day.  A week after Jaeger first went into administration, it axed 103 jobs and shut 13 stores.  The jobs cut comprised of 47 in-store positions and 56 head office and distribution roles.  The decision reduced Jaeger’s store estate to 63 shops and concessions, and 244 staff.  EWM Group had already called in administrators for its Edinburgh Woollen Mill and Ponden Home business earlier in November.  Last week there was hope from FRP Advisory, administrator for the businesses, as it issued sale contracts to a potential buyer for 400 stores trading under the Edinburgh Woollen Mill brand.  However, it is unlikely to save many stores from closure, adding to the almost one-third of its 2571 employees already made redundant.  The move to buy up Jaeger would fit with M&S’s new strategy of selling third-party brands, with existing tie-ups with the likes of Nobody’s Child and Ghost.  It is also thought to be among those in the running for some of Sir Philip Green’s collapsed Arcadia Group retail brands, such as Topshop.  Last week at M&S’s Christmas trading update, chief executive Steve Rowe explained the rationale behind teaming up and buying new brands.  “M&S wants to build a curated set of brands and merchandise largely for our online business but also through filling some of that excess space we have in stores,” he said.  “We’ve got no intention of turning M&S into a department store at all. This is about finding and partnering with adjacent brands.  “Adjacent in terms of style, adjacent in terms of customer base that enhance the M&S offer and make it the place to go to for an online shop.”

 

LandSec receives only 65% of December rent owed

One of the UK’s biggest commercial landlords has seen a slump in rent collections in the final three months of 2020 as tenants – particularly retailers – struggled to make payments.  Land Securities, also known as Landsec, said it collected 65 per cent of rent collection due on December 25 – compared with 94 per cent at the same point a year earlier.  Bosses had been due £112 million in rents.  Some £11 million had already been deferred, reduced or cancelled by agreements or due to administrations and CVAs.  A further £35 million went missing, including £14 million which is pending documentation of agreed concessions.  Office tenants were the best payers, with 87 per cent making the rent deadline.  However, the rest of Landsec’s central London estate, mainly made up of retail and leisure businesses, slumped to just 29 per cent.  Only 36 per cent of rents due by regional retail tenants was paid as lockdowns and tier restrictions in the run-up to Christmas led to closures.  Commercial landlords have been particularly concerned about the state of high streets, with London hit harder than other areas of the country.  The capital has remained a ghost town since November’s lockdown – with just a handful of busier days between the end of the lockdown and introduction of tiering, which saw non-essential retailers close their doors again.  In the nine months to December 24, Landsec said the total gross amount due had been £553 million.  Insolvencies and CVA agreements saw that fall £15 million, it fell a further £21 million with agreed discounts and £8 million in deferred payments.  The property giant has an £11.8 billion portfolio spanning 24 million square feet, including the Piccadilly Lights in the West End and the regeneration of London’s Victoria.  It also owns the Westgate Oxford and Trinity Leeds retail centres.  The news from Landsec comes a day after rival British Land revealed it managed to collect less than half of the rent it is due from the shops and other retail outlets that rent its space, as two-thirds of them were forced to close in January.  British Land said it had collected 46 per cent of December rents by Thursday last week, seven days after they were due.

 

Online retail sales accounted for nearly half of all spend in December

Online retail sales skyrocketed 52.2 per cent throughout December as lockdown restrictions decimated in-store sales.

According to the latest data from Barclaycard, overall consumer spending throughout December dropped by 2.3 per cent compared to 2019 despite the staggering growth of online sales, marking the largest decline since June.

Supermarket shopping continued to be the most resilient sector throughout the month as shoppers stocked up on food ahead of Christmas and New Year Eve celebrations.

Physical supermarket shopping jumped 14.7 per cent, but this was eclipsed by an 88 per cent rise in online grocery spend.

This was reflected in the wider retail market, with in-store retail spending falling 8.3 per cent, but ecommerce sales jumping 52.2 per cent accounting for a whopping 46.8 per cent of all retail spend.

Aside from grocery sales specialist retailers like toy stores and gift shops, alongside fashion retailers, saw significant online growth, increasing 61.9 per cent and 34 per cent respectively.

Local shops also enjoyed a boost, with specialist food and drink retailers like butchers recording a 43.7 per cent rise.

Conversely retailers largely reliant on footfall such as department stores saw a drop of 15.2 per cent.

“Changing restrictions continue to have an impact on our spending habits – which was particularly acute across the high-street and hospitality sectors in December, with restaurants, pubs and bars hardest hit during a low-key festive season in the majority of the UK,” Barclaycard’s head of consumer products Raheel Ahmed said.

“As a result of further restrictions, online grocery spend surged and fuel declined as the majority cancelled their plans and stayed home for the holidays.

“Additionally, many still continued to support their local shops where possible, spending more time in their local community. Small businesses have continued to remain agile to these changing consumer habits – with many going online for the first time. From dog walking services to subscriptions of weekly meal kits, small businesses are exploring new ways to reach their customer base.”

 

 

Tesco, Asda, Aldi & Waitrose crackdown on mask-less shoppers

Tesco, Asda, Aldi and Waitrose are the latest supermarkets to take a tougher stance on customers who refuse to wear a face covering without a medical exemption, and they all urged shoppers to be respectful towards staff.  It came as a police chief said officers will be on stand-by to help with dissenters who become “aggressive” in supermarkets.  On Tuesday, Tesco said it would not let customers who are not wearing a face covering into its stores unless they are exempt in line with government guidance, as it asked shoppers to be “kind, patient and respectful” towards staff.  “We are also asking our customers to shop alone, unless they’re a carer or with children,” a spokesman said.  “To support our colleagues, we will have additional security in stores to help manage this.”  Echoing Tesco’s calls for customers treat staff with respect, an Asda spokesman said: “If a customer has forgotten their face covering, we will continue to offer them one free of charge.  “But should a customer refuse to wear a covering without a valid medical reason and be in any way challenging to our colleagues about doing so, our security colleagues will refuse their entry.”  Waitrose is also following suit with marshals at entrances to offer disposable masks and deny entry to anyone refusing to comply.  It has also suspended click-and-collect services based within John Lewis department stores to avoid non-essential travel, while in-home services will be carried out only if “essential” to customers’ wellbeing.  Andrew Murphy, executive director of operations at Waitrose parent company, the John Lewis Partnership, said: “By insisting on the wearing of face coverings, over and above the social distancing measures we already have in place, we aim to make our shops even safer for customers.”  Aldi said customers would no longer be permitted to enter stories without a face mask, unless they have a medical exemption, and they would be reminded to shop alone if possible.  Chief executive Giles Hurley said: “The safety of our colleagues and customers is our number one priority. Wearing a mask is mandatory for everyone that shops at Aldi, except for the small number of people who have a medical exemption.”  They are the latest supermarkets to ban maskless shoppers, after Morrisons announced it would enforce the wearing of masks for customers unless they are medically exempt, while Sainsbury’s said its security staff at entrances will “challenge” shoppers who are not wearing face coverings or who enter stores in groups.  Asked whether Co-op Food stores will take similar steps, chief executive Jo Whitfield said all customers “must take responsibility for wearing a face mask”.  “We’ve increased our in-store messaging to remind customers and government guidance does state that the police can take measures if members of the public don’t comply with this law,” she said.  Lidl said they would “remind those not wearing a face covering of the Government guidelines and their own responsibility to keep themselves and others safe”.  Metropolitan Police Commissioner Dame Cressida Dick said London officers are prepared to assist supermarket staff if customers become “obstructive and aggressive” when told they must wear a face covering.  Her comments came as supermarket workers spoke of the difficulties in getting proof from customers who claim they are exempt from wearing a mask, while others have suffered abuse from shoppers after asking them to follow the rules.  A Tesco worker from Gloucestershire said she was “horrified” by reactions she had received after challenging customers, adding: “I find, and so do my colleagues, that it’s not as strict as the first lockdown.”  A staff member at an Asda store in north-west Merseyside said: “I used to ask people on the front door for proof of exemption and the abuse I got was mostly from the younger generation.  “My manager told me we have to offer them a mask but can’t enforce it so I feel it’s a waste of time.”  Policing minister Kit Malthouse said he believes all supermarkets should follow in Morrisons’ footsteps, suggesting some stores have become lax with safety measures.  Speaking on Times Radio, he said: “I think that, understandably, following the November lockdown there was an element of release and therefore the person at the door, the sanitation station, the traffic light system, the queues outside obviously receded a bit.  “What we hope now, and I know all of them will, that they’ll see their responsibility and start to put those things back in place.”  Asked whether police should intervene, Malthouse said some officers have issued fines in retail settings.  “What we hope is the vast majority of people, or everybody, will be encouraged to do so by the shop owner,” he said.

 

 

Online retail sales growth hit 13-year high in 2020

The Covid pandemic and the dramatic increase in online shopping it prompted allowed the UK’s ecommerce sector to enjoy the highest online sales growth in 13 years.  Total online retail sales growth for 2020 was up 36 per cent year-on-year – the highest annual growth seen since 2007, according to the IMRG Capgemini Online Retail Index.  With the year being underscored by lockdowns and restrictions on the consumer way of life, the full year growth figure significantly outperformed the start-of-year prediction of 7.8 per cent.  As the UK navigated a series of tiered lockdowns, online retail sales in December defied forecasts of a poor Christmas trading period.  With sales starting early and Christmas travel plans halted, online shopping continued the momentum it had built throughout the quarter – with sales up 37.6 per cent across the three months.  Online sales growth in December alone was 37 per cent year-on-year, a slight dip on November’s growth of 39 per cent year-on-year, thanks to the Black Friday sales period and the second national lockdown in England.  Breaking down the results from a category perspective, the holiday period drove significant sales in electricals – up 116 per cent year-on-year.  Gardening sales were also strong for December – up 165 per cent year-on-year.  These figures round-off an extremely successful year for both categories, with electrical sales up 90.8 per cent and garden sales up 222.5 per cent.

Meanwhile as social interactions dwindled throughout the year, poor December clothing sales of 3.2 per cent year-on-year failed to boost the yearly figure of just 1.3 per cent.  This was down from 8.2 per cent in 2019.  Footwear was particularly hard hit, declining five per cent year-on-year in December and -10.8 per cent overall in 2020.  Other notable spending trends in December include the widening of the gap between multichannel and online-only retailer performance – with the two groups recording growth of 52.4 per cent and 11.4 per cent respectively.  For 2020 as a whole, the results echoed this pattern, showing overall sales growth of 57 per cent vs 9.1 per cent respectively.  In comparison, online-only retailers recorded 9.8 per cent growth in 2019.  “Retail in 2020 has been fundamentally shaped by the pandemic, which caused disruption to consumer demand norms and a shift in focus to digital channels; reflected in the strongest online year-on-year growth in 13 years,” Capgemini managing consultant Lucy Gibbs said.  She added: “Learnings from 2020 will be crucial as we navigate the uncertainties this year and a sense of a new baseline will take a while to be established.  “Retailers best set to ride out the storm are those with a strong online presence and the ability to remain nimble, using demand sensing to react to the changing landscape and adapt to surges both instore and online, combined with a readiness to take on opportunities as they come in 2021.”  IMRG insight director Andy Mulcahy said: “At the start of each year we usually provide a forecast for online sales growth for the coming year. In 2020 things changed rapidly, and it makes predicting 2021 extremely difficult.  “We could end up with a year where significant pandemic disruption lasts for the first quarter, the first half, or most of the year; shopper spend might divert strongly to experiences and holidays if things open up again; the economic situation might lead to a squeeze on spend; the list of potential macro variables goes on.  “As it is so uncertain, some datasets are going to look odd this year and we think putting a forecast out would not be useful. This might be a year where we have to adjust our understanding of what good looks like.  “For example: while growth in Q1 will probably look similar to previous lockdown rates, from April in 2020 those rates were extremely high and will be hard to build upon.  “If a category was up 120 per cent one month in 2020, recording a drop of 20 per cent for that same month in 2021 might actually be considered a reasonable result.”

 

 

 

ASOS expects £40m profit from Covid-19 restrictions after Christmas sales soar

Asos has said it expects the impact of the pandemic to provide a £40 million profit boost which will help drive it towards the top of its annual targets.  It comes after Asos has reported a surge in sales during a strong Christmas trading period.  Group sales increased by 23 per cent to £1.33 billion in the four months to December 31, when UK retail sales surged 36 per cent to £554.1 million.  The online fashion retailer said it “surpassed expectations” and benefited from investment in product, pricing and marketing, as well as “stronger than anticipated consumer demand for our products”.  Asos said the varying levels of Covid-19 restrictions globally, which are likely to be in place for several more weeks, should result in a net profit of “at least £40 million” in the first half.  However, it also said it expects to be hit with £15 million in Brexit tariff costs due to Country of Origin rules affecting some of its goods. Active customer base increased by 1.1 million to 24.5 million in the period, when growth in new customers offset the impact of existing customers having fewer reasons to buy occasionwear.  However, Asos warned on the likely economic impact of the pandemic on its core 20-something customer.  It added that, while overall demand in the market is “supressed”, it remains “more resilient than our initial expectations”.  ”We are really pleased with the strong performance we have delivered, which is testament to both the strength of our multi-brand model and the hard work of our people,” chief executive Nick Beighton said.  “We have continued to execute well and deliver for our customers, whilst investing in growing our business and driving further efficiency through a strong operational grip.  ”Looking forward, given the uncertainty associated with the virus and the impact on customers’ lives, our cautious outlook for the second half of the year remains unchanged.  “However, the strength of our performance gives us confidence in our continued progress towards capturing the global opportunity ahead.”

 

Just Eat Takeaway sees order growth of 57%

Just Eat has reported that quarter order growth accelerated to 57% in the fourth quarter of 2020.

Jitse Groen, chief executive of Just Eat Takeaway.com, said: “The fourth quarter of 2020 marks our third consecutive quarter of order growth acceleration. Our investment programme is very successful and has led to significant market share gains in most of our countries. The progress in the UK is particularly exciting; order growth of 58% and we have increased our delivery orders nearly five-fold in the fourth quarter of 2020 compared with the same period in 2019. In 2021, we will continue to invest in price leadership, improving our service levels and expanding our offering to restaurants and consumers.”

The company added: “The company has put tremendous effort into improving the Just Eat UK business. The marketing strategy was changed and marketing investments have been increased. The UK sales force has doubled compared with the previous year, driving significantly increased restaurant choice for consumers, and accelerating the roll-out of our logistical network. Scoober has only recently been launched in London and many cities in the UK will follow.

This allows Just Eat to further add premium restaurants to its offering, with very short delivery times, excellent service, and much lower delivery fees than its competitors. Delivery orders in the UK surged 387% in the fourth quarter of 2020 compared with the same period in 2019. Management expects that Just Eat’s delivery orders only (excluding Marketplace Orders) will soon overtake the total food orders of the UK’s number three player.

The company has launched a new loyalty programme in Canada, which management believes will further support the high growth. In Germany and the Netherlands, order growth has been extraordinary, adding more than 12 million orders and four million orders respectively in the fourth quarter of 2020 compared with the same period last year.

 

 

Deliveroo targets 100 new UK towns & cities in 2021

Online delivery group Deliveroo plans to expand into around 100 new towns and cities across the UK in 2021 as it seeks to capitalise on its popularity during the COVID-19 pandemic, it said on Tuesday.

Demand for home delivery of restaurant food and groceries has soared during the crisis with the hospitality industry largely closed.

Deliveroo’s expansion means around 4 million more people will be able to access its services for the first time in 2021, it said.

The delivery company also plans to expand its reach in around 150 of the areas it currently operates in, which, together with the new towns and cities it expects to enter, will bring the total number of people that could order from Deliveroo to almost two-thirds of the population of the United Kingdom.

Bankers say Deliveroo could look to list its shares this year to grab some of the billions of dollars of investor cash that fuelled a record-breaking run of tech IPOs in the United States last year.

Amazon owns 16% of Deliveroo’s equity.

In 2020 some 20,000 new restaurant partners joined the firm’s UK delivery platform, while its grocery platform grew with new partners including supermarket groups Sainsbury’s, Morrisons, Aldi and Waitrose.

Deliveroo created work for an additional 25,000 riders in the UK last year, taking the total to over 50,000.

 

 

Primark owner warns of £1.1bn hit to sales as golden quarter sales plunge 30%

Primark parent company AB Foods has warned of a hit from lost retail sales of more than £1 billion if Covid lockdowns force its stores to stay closed until the end of February.  The budget fashion retailer said 305 of its 389 shops around the world are currently shut, which is expected to cost it £1.05 billion in lost sales – up from the £650 million hit forecast at the end of December.  AB Foods – which operates 190 Primark shops in the UK – said it now expects to see half-year underlying earnings wiped out, with the firm forecasting to be “broadly break-even” against profits of £441 million recorded last year.  However, it said it could be facing a £1.85 billion sales impact if its entire store estate has to close and remain shut until the end of March, knocking profits by a further £300 million.  Primark has already seen £540 million in lost retail sales from store closures due to Covid restrictions in its key Christmas quarter, with sales slumping 30 per cent in the 16 weeks to January 2.  AB Foods said it saw trade badly impacted by the November lockdown in England and restrictions across Europe, given that it does not sell online.  Current shop closures account for around 76 per cent of its retail selling space.  The firm also said it has been able to offset some of the trading impact with overhead costs cut by 25 per cent due to store closures.  “The impact of store closures on Primark’s performance is significant,” AB Foods said.  “We now expect full year sales and adjusted operating profit for Primark to be somewhat lower than last year.”  The firm said trading was strong while stores were open, with like-for-like sales declines running at 14 per cent in the 16-week period.  Stores at retail parks accessible by car lifted on a year earlier, but high street and shopping centre sites were badly impacted by the pandemic.  Despite the woes, it opened another five shops over its festive quarter and pledged to “continue to expand retail selling space”.

 

400,000 retail jobs could be lost thanks to online retail and the WFH boom

Up to 400,000 retail jobs could be lost on the UK’s high streets thanks to the boom in online shopping and working from home.

High streets across the country could lose between 20 per cent and 40 per cent of their shops leading to hundreds of thousands of job losses for the retail sector, according to new figures from KPMG.

Online shopping and remote working are predicted to last long after the pandemic has ended, which KPMG says will deal a near fatal body blow to locations reliant on commuter footfall.

Bracknell, a hotspot for London commuters, was judged to be the most at risk with up to 27.4 per cent of jobs in the area expected to continue to be conducted from home after lockdown restrictions have been lifted.

This reduction in commuter footfall is predicted to lead to a loss of 1505 jobs in the area, or roughly 38 per cent of the local retail sector.

Other areas expected to be heavily impacted include Hemel Hempstead, Basingstoke, Warrington and Guildford.

London could also see a whopping 122,146 retail jobs lost, representing around 30 per cent of the capital’s retail workforce, and 2.3 per cent of its total.

“The pandemic has accelerated the adoption of online shopping, with consumers more likely to purchase household goods online than in a store,” KPMG chief economist Yael Selfin said.

“It has also made working from home acceptable and online gatherings rather than meeting in person the new norm, freeing endless hours of business travel and expense for better use. People are unlikely to return to the old ways of doing things.

“With fewer people coming into big cities and towns to work and shop, that leaves a big space in areas that were once characterised by bustling shops and offices.

“Those places that are most at risk are those that have little else to attract locals and visitors from further afield.”

A number of high-profile retailers including Debenhams, Arcadia and Edinburgh Woollen Mill have already collapsed due to widespread closures during the pandemic, leading to tens of thousands of job losses.

 

 

Lidl beats Aldi to be crowned cheapest supermarket in 2020

Lidl has narrowly beaten Aldi to be named the UK’s cheapest supermarket of 2020, according to a Which? analysis.  The consumer group tracked the price of 45 popular products such as Hovis bread, Knorr stock cubes and free-range eggs in eight major supermarkets for at least 100 days between January and December 2020.  It calculated the average price of each item over the year and the total average cost of all 45 items in the “trolley” – taking the weight and quality of items into account.  Which? said this was the first time it has included Lidl and Aldi in its annual study – which now includes own-label items as well as branded ones.  Lidl was the cheapest supermarket in the study, with the basket costing £42.67 on average.  Just 34p put Lidl ahead of its discount chain rival Aldi, with the latter’s basket of items costing £43.01 on average.  Asda was the third-cheapest supermarket with the same basket of items costing £48.71 on average – a difference of more than £5 when compared with Aldi or Lidl.  Waitrose was the most expensive supermarket in the study. The average cost of the 45 items was £68.69 – around 60 per cent or £26.02 more than a similar shop at Lidl.  Which? also found stark price differences between popular own-label products at Waitrose and Lidl.  For example, Waitrose’s own-label cooked and peeled cold water prawns cost £4.60 on average, while the equivalent at Lidl cost £1.99.  Waitrose’s own-label six pack of very large free-range eggs cost £2.47 on average, whereas a similar product was nearly half the price – £1.27 – at Lidl.  Ocado was the second most expensive supermarket in the study, with its basket costing £66.83, while Sainsbury’s was the third-priciest retailer, at £56.38.  Supermarkets had to adapt swiftly to changing customer behaviour in 2020 as the coronavirus crisis took hold, with tight household budgets, panic buying and surging demand for home deliveries playing a part.  Which? said neither Aldi nor Lidl offer a full delivery service and they would have struggled to compete with supermarkets who ramped up their delivery service at the start of the pandemic.  However, Aldi offered food parcels for home delivery to help vulnerable people get essential goods.  “Many households have been under financial pressure due to the pandemic, so getting value for money on their weekly shop has become more important than ever,” Which? head of home products Natalie Hitchins said.  “Our analysis shows that customers do not have to pay over the odds for their groceries.  “Customers looking to save money this new year and cut down on the cost of their weekly shop should consider shopping around for the best prices.”  Here are the average costs of a supermarket trolley based on 45 products, according to Which?

  • Lidl, £42.67
  • Aldi, £43.01
  • Asda, £48.71
  • Tesco, £53.30
  • Morrisons, £53.61
  • Sainsbury’s, £56.38
  • Ocado, £66.83
  • Waitrose, £68.69

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