The key retail headlines that caught my eye this week.
Iceland blames £71m loss on Brexit uncertainty
Iceland has blamed its widening losses on the ongoing uncertainty around Brexit and the December general election. The frozen food retailer recorded pre-tax losses of £71.8 million for the year to the end of March. Iceland also said it had £5 million of income owing to the rising price of packaging waste recovery notes – as a result, adjusted EBITDA fell to £133 million.
M&S to reopen 83 cafes with VAT cut savings passed to customers
M&S has revealed plans for the next wave of café reopenings in line with the government guidance. The retailer will reopen a further 83 cafes across England, Scotland and Northern Ireland from July 22. With 118 cafes already open, it will bring the total number of M&S cafes serving customers across the UK to 201.
Superdrug reopens nail bars but brow & lash studios remain shut in lockdown
Superdrug has reopened its in-store nail bars, in line with government guidance about what beauty services can resume operation as part of the next phase of the lockdown exit. The guidance stipulates that nails, waxing and massage therapies in England are able to go ahead but face treatments, including brow and lash threading or waxing, are not yet permitted. Superdrug reopened 99 Beauty Studio nail bars and welcomed 245 nail technicians back to work this week.
M&S confirms 950 staff at risk of job cuts
Marks & Spencer has confirmed that 950 jobs are at risk of being as part of plans to reduce store management and head office roles. The high street retailer said the proposals would help move the company to “a leaner, faster retail management structure” as it accelerates its ongoing transformation plan, which had been disrupted by the coronavirus pandemic and subsequent lockdown. M&S said it has started collective consultation with employee representatives and has set out plans to first offer voluntary redundancy to affected staff.
Ted Baker to cut 500 jobs across retail and HQ
Ted Baker is reportedly planning to cut 500 jobs as it struggles to survive amid the UK’s tough trading climate. The job cuts represent a quarter of its UK workforce, and will take place across both retail and its head office. Ted Baker staff were informed this month that at least 500 roles were being axed in an effort to save £6 million by the end of the year.
Pret to launch vegan bakery counter
The JAB Holdings-owned group has announced plans to overhaul its bakery range and launch Veggie Pret’s Vegan Bakery in all its Veggie Pret sites from Tuesday this week.
Costa unveils new concept store
Costa Coffee, which is owned by Coca-Cola, is to pass on the government’s full 15% VAT cut to customers for all food and drink at its owned stores. The move covers 1,500 Costa Coffee stores and more than 9,000 Costa Express machines. In-store reductions include a latte, which was £2.55 and will now cost £2.23; a flat white (was £2.70, now £2.36); ham and cheese toastie (was £2.95, now £2.58) and salted caramel brownie (was £2.25, now £1.97). Diners will still receive a 25p discount for using a reusable cup. A regular-size Costa Express coffee was £2.40 but will now cost £2.10. Costa Coffee said it had also recommended its franchise partners passed on the saving.
Regent Street owner The Crown Estate offers switch to turnover based rents
The Crown Estate, which owns the whole of London’s Regent Street and around half of St James’s, has reportedly offered some of its tenants the choice to switch to turnover based rents. The property giant has asked for nine per cent of turnover or a percentage of what it would normally receive in quarterly rents, on a scale starting at zero per cent for the current period and rising to 75 per cent by next month, The Sunday Times reported. The Crown Estate said it was focusing its help on small and independent businesses.
Co-op staff wear face masks early on to encourage use
Central England Co-op staff have begun wearing face coverings ahead of government implementation in an effort to encourage customers to use them. From Friday 24th July, face coverings will become compulsory for customers to wear them in stores. Co-op staff at over 400 food stores have donned face coverings as the retailer hopes customers will embrace the practice.
Hammerson adds crowd checker to soothe consumers in the UK & France
Hammerson has launched a new Crowd Checker feature so “nervous” shoppers can check when the safest times to shop are.
The shopping centre giant has rolled out the new Crowd Checker feature, which uses artificial intelligence to track the exact number of people in stores in real-time, at its centres in Brent Cross, Cabot Circus and Westquay.
Shoppers who wish to avoid crowds will now be given a live status on their local shopping centre, including “now is a great time to visit”, “now is a popular time to visit” or “the centre is really popular right now”.
The new Crowd Checker tool, which uses ShopperTrak’s virtual footfall analysis technology, aims to encourage vulnerable or anxious shoppers back into stores amid continued low footfall.
It can be accessed on each shopping centre’s dedicated website, and is expected to be rolled out to more locations later this year.
Tesco staff in 1920 stores to clean shops after contractors axed
Tesco has reportedly handed staff in 1920 of its stores extra workload after its cleaning contractors were axed. The contract cleaners’ duties, which includes washing windows and mopping floors, are reportedly being transferred to store staff. Staff have expressed concern, calling the extra workload a “psychological blow” after unprecedented demand due to the Covid-19 pandemic, The Guardian reported.
AO World staff in line for a share of £240m bonus pot
Around 3000 staff at AO World could share a £240 million bonus pot as part of a bumper reward scheme unveiled by the online electricals retailer. AO World said its new scheme – called the value creation plan – would pay out bonuses to staff for share price rises above £5.23 a share – equivalent to a £2.5 billion stock market value and marking a rise of more than 200 per cent on current stock prices. Executive bosses could land up to a mammoth £20 million each in bonuses under the proposed plans if shares hit £9.41.
High Streets could become residential as Brits shift online
The UK’s embattled high streets could be transformed into residential hubs as consumers increasingly shift to online shopping, especially after the coronavirus pandemic. In a report that seeks to review planning laws, the move could create at least 800,000 new homes, the Social Market Foundation (SMF) suggested. The SMF also said that while there is an increase in online sales, the decline of high streets across the UK would not be reversed by policies that attempt to “turn the clock back”.
Matalan revenue drops 72%
Matalan has seen its revenue plunge by over 70 per cent, confirming the “severity” of the impact of Covid-19 on trading. For the 13 weeks to May 30, revenue dropped by 72 per cent to £75.3 million, compared with the same period the previous year. EBITDA made a loss of £10.2 million in the quarter, after the adoption of accounting standard IFRS 16. This compares with a profit of £50.4 million in same period in the previous year. The fashion and homewares retailer ended the quarter with cash of £40.9 million, compared with £71.2 million the previous year.
Epiris to commit £43m to Casual Dining Group
According to reports, the UK-based private equity firm Epiris, which is in exclusive talks to acquire Casual Dining Group, will commit £43m of funding for the business if a deal is successful.
Whitbread to open entire restaurant portfolio by 5th August
Whitbread has said it will have reopened its entire portfolio of more than 750 restaurants by Wednesday, 5th August. The company said brands including Bar + Block, Beefeater and Brewers Fayre would also participate in the government’s Eat Out To Help Out scheme. The discount scheme, which gives guests 50% off their bill up to £10 per person when dining from Monday to Wednesday, will run alongside Whitbread’s current restaurant loyalty schemes, meaning guests can still earn points when dining. Whitbread said there would be plenty of additional offers coming up for loyalty members in August that could be used from Thursday to Sunday.
Gear4music raises profit outlook as UK sales soar 80%
Gear4music has recorded a total sales increase of 68 per cent to £37.3 million in the three months to June 30 as lockdown prompted Brits to play instruments while staying home.
Sales in the UK increased by a colossal 80 per cent to £21.2 million while international sales climbed by 55 per cent to £16.1 million.
The musical retailer said it now expected full-year profits to be ahead of previous expectations.
Selfridges unveils The Bike Shop
Selfridges has branched out to cycling with the opening of its first-ever bike shop inside its Oxford Street flagship. The Bike Shop is the latest concept to take over the department store’s The Corner Shop and will see the space transformed into an electric vehicle destination complete with e-bikes, apparel and exclusive gear. Customers will be able to discover and try the bikes and accessories from brands like Mate X, Angell and Superstrata. There will also be a selection of push bikes from Veloretti and Cheetah, and even penny farthings from Richards of England in both adult and child sizes. Meanwhile the accessories available include the Closca folding helmet, Ausair face masks that protect against harmful pollutants, and Litelok, the world’s lightest flexible high-security bike lock. Selfridges said the products available would rotate weekly and will be available to test drive in a dedicated zone in the department store’s car park. For customers unable to get to store, the range will be available to order on Selfridge’s website.
UK government postpones business rate revaluation again
The UK Government has officially confirmed that the next business rates revaluation will take place in 2023, and called for evidence for a wider review of the rating system. The news comes after it was announced in May that the business rates revaluation in 2021 would be postponed, but an exact time for when it would be rescheduled was not revealed until today. The two-year delay means the next revaluation will take effect in April 2023, and to reflect the impact of Covid-19, this revaluation will be based on property values as of April 1, 2021.
Westfield’s plans to turn House of Fraser site into office space approved
Plans to convert two-thirds of Westfield London’s House of Fraser store into a WeWork-style office space has been approved by the local council. Last night, the planning committee at Hammersmith & Fulham Borough granted permission for Unibail-Rodamco-Westfield’s proposals to redevelop the 104,000sq ft House of Fraser site into 68,000sq ft of flexible office space and 32,000sq ft of retail space across two units. No immediate changes have been announced for the House of Fraser store, which only recently reopened amid the easing of lockdown restrictions on non-essential retail.
Government updates guidance on mandatory face coverings
People will need to wear a face covering inside shopping centres, banks, takeaway outlets, sandwich shops and supermarkets under updated regulations that take effect in England from tomorrow. Face coverings will also be mandatory in railway stations and airports, while venues such as restaurants, pubs and gyms will be exempt. The Department of Health and Social Care confirmed it would be compulsory to wear a face covering when buying food and drink to take away from cafes and shops, meaning that people will be required to wear one in the likes of Pret A Manger. As well as shops and supermarkets, face coverings must be worn inside banks, building societies and post offices under the regulations which are enforceable by the police. Wearing a face covering will not be made mandatory in other venues including eat-in restaurants and pubs, hairdressers and other treatment salons, gyms and leisure centres, cinemas, concert halls and theatres. “As we move into the next stage of easing restrictions for the public, it is vital we continue to shop safely so that we can make the most of our fantastic retail industry this summer,” Health Secretary Matt Hancock said.
Dyson to cut 900 jobs as consumers shift online
Dyson has said it will axe 900 jobs across the company as the Covid-19 crisis has shifted consumer purchases online. The tech brand and retailer employs a total of 4000 people in the UK, and those affected will be staff in retail and customer service. At least 600 jobs will be scrapped in the UK, with the other 300 being elsewhere in Dyson’s global operations. While demand for its products including floor cleaners and air purifiers remained high, Dyson said customers were buying the products online rather than going into stores. The change in consumer habits was driven by the government-mandated lockdown which came into effect in late March and saw non-essential retailers shut stores across the UK. “The Covid-19 crisis has accelerated changes in consumer behaviour and therefore requires changes in how we engage with our customers and how we sell our products,” Dyson said.
Key themes of the week - reopenings, jobs, facemasks
Key article of the week - High Streets could become residential as Brits shift online
Key question of the week - Will mandatory facemasks in shops help or hinder consumer confidence?