Footfall rises fourfold last week
UK retail footfall grew 4.1 per cent last week, a four fold increase from the previous seven day period. According to insights firm Springboard, the latest data compares to a rise of 0.8 per cent in the prior week and 1.8 per cent in the same week last year. The figures also reveal that shopping centres saw the biggest footfall uplift at 7.1 per cent, followed by high streets at 3.2 per cent and retail parks at 2.7 per cent.
Frasers Group buys DW Sports out of admin for £37m
Mike Ashley’s Frasers Group will spend £37 million acquiring competitor DW Sports from its administrators. Earlier this month Frasers Group was reported to have offered a £30 million bid for the former Wigan Athletic owner Dave Whelan’s DW Sports, including its 73 gyms and 75 stores. Whelan is said to be a long-term rival of Ashley’s, dating back to their days owning competing football teams. Ashley’s company will now spend £37 million on DW Sports, despite the latter reporting a loss of £20 million in the year to March 2019. Frasers Group will pay up to a further £6.9 million for stock from DW Sport’s gyms, although it is not buying the business name or brands. Speaking in light of the deal, Frasers Group said it would strengthen its gym and fitness business Everlast with the deal. DW Sports joins Jack Wills, Evans Cycles, Sofa.com and House of Fraser in Ashley’s recent spate of retail acquisitions.
M&S partners with Doddle to launch drive-through click & collect service
Marks & Spencer has partnered with Doddle to trial new click & collect technology in a number of its stores. M&S will now launch a drive-through collection service at its store in Camberley, allowing shoppers to collect their orders contactlessly from their vehicles. It is also launching rapid contactless click & collect services at its stores in Hempstead Valley, Camberley and Longbridge. It comes as the retailer has dramatically expanded the number of stores offering click & collect during lockdown, adding 153 locations by increasing the use of in-store picking and packing in its operations. “Great digital technology in our stores is really important for offering our customers a great experience and for connecting the online and in-store journey,” M&S head of digital operations Neil Phillips said. “These trials with Doddle offer market leading solutions for Click & Collect, a proposition which will only grow over the coming years as the trend towards online shopping continues to accelerate. We’ll be listening carefully to our customers’ feedback.” It forms part of M&S’ “Never the Same Again” programme which is aimed at quickly integrating digital technologies into its operations. It comes at a torrid time for the retailer which has been one of the hardest hit by the pandemic, announcing last week that I was set to scrap 7000 jobs over the coming quarter.
Tesco to create 16,000 new permanent jobs
Tesco has announced that it will create 16,000 new permanent jobs in the UK, most of which will support the surge in customer demand at its online business. The Big 4 giant said most of the roles are expected to be filled by staff who joined on a temporary basis at the start of the pandemic, when Tesco went on a hiring spree in response to the surge in demand in the lead-up to and early weeks of lockdown. The grocer said the new jobs would consist of 10,000 new picker jobs assembling online customer orders and 3000 new delivery drivers. The remaining 3000 jobs on offer would for a variety of roles stores and distribution centres. Tesco added that the new permanent roles were in addition to 4000 already created since the start of the coronavirus outbreak. The news comes after several gloomy weeks for the UK retail sector, which has seen more than 40,000 job cuts since the lockdown was announced in late March. However, grocers have generally bucked the trend of wider retail, particularly because of skyrocketing growth in online demand as customers stayed at home during lockdown. Tesco said it was now serving 1.5 million customers a week online, more than twice as much as the 600,000 it had at the start of the outbreak. “Since the start of the pandemic, our colleagues have helped us to more than double our online capacity, safely serving nearly 1.5 million customers every week and prioritising vulnerable customers to ensure they get the food they need,” Tesco UK chief executive Jason Tarry said. “These new roles will help us continue to meet online demand for the long term, and will create permanent employment opportunities for 16,000 people across the UK.”
Lidl expands next-day delivery to thousands more customers with Buymie
Lidl has extended its same-day delivery service to tens of thousands more customers as it expands its partnership with Buymie. Buymie will now deliver Lidl groceries to 86,000 new households in Cork, Ireland, as it continues its “rapid expansion” during the pandemic. This will take the total number of households across the UK and Ireland that Buymie delivers to 750,000 households, having grown 325 per cent during the first half of the year. This will mark the third city serviced by the rapid delivery startup, which is also available in Dublin and Bristol. It works with Lidl and Tesco in Ireland, and recently partnered with Co-op in the UK. “We’re absolutely thrilled to be announcing our official launch into Cork with our retail partner Lidl Ireland,” Buymie’s chief executive Devan Hughes. “2020/21 will see rapid expansion of the same-day delivery channel as consumers confront a new reality for the foreseeable future.”
John Lewis latest to roll out virtual queuing system to help vulnerable shoppers
John Lewis has launched a new virtual queuing system which will “let you wait for your turn in line from the comfort of your car”. The new virtual queuing system will allow shoppers to scan a QR code with their smart phones then track their position in a virtual queue via SMS in real time. Customers will be informed via text when they are nearing the front of the queue and when they can enter the store. Its new system, which is being trialled for four weeks at three John Lewis stores and six Waitrose stores, will also enable shoppers to book a specific time slot to return if they cannot enter the store immediately. The system has been introduced in partnership with Qudini, which has also introduced its digital queuing system in O2 stores across the UK. “As a nation, we’re famous for our love of queuing but as the uncertainty around the pandemic continues and the long hot days of summer become a distant memory, we know a long wait outside in the rain to enter your favourite shop isn’t an appealing notion for anyone,” Waitrose customer experience director Peter Cross said. “Which is why we are thrilled to work with Qudini on this brand new trial, which will let you wait for your turn in line from the comfort of your car, ensuring that everyone can continue to shop safely and seamlessly. It’s a great opportunity for us to test the viability of this type of queueing for the future.” Virtual queuing systems have been popping up across the UK as retailers attempt to assuage concerns of customers anxious about returning to shops. Asda and Sainsbury’s have both introduced their own virtual queuing initiatives, while Aldi has introduced a traffic light system at a number of stores to limit the number of shoppers in store.
Next to open beauty halls in former Debenhams sites at intu centres
Intu has confirmed it has signed deals with Next for it to open new concept beauty halls in former Debenhams stores within its shopping centres. The fashion retail giant will open its new beauty concepts in former Debenhams sites in Intu Metrocentre, Milton Keynes and Watford. The new Next concepts will also have home and womenswear items on display. The news comes after Next revealed in May that it agreed terms to open beauty concepts in three former Debenhams stores at The Oracle in Reading, Highcross in Leicester and Centrale in Croydon – all of which are owned by Intu’s main rival Hammerson. While some retailers are looking to reduce their store footprint in light of the financial impact of the coronavirus lockdown, Next has bucked the trend. The fashion retailer said its beauty concepts will be complimented by its online beauty business. Next currently sells over 200 beauty brands on its website – including premium brands Estee Lauder, Burberry, Bvlgari, Emporio Armani, Yves Saint Laurent and Lancôme – and acquired Fabled in July 2019 from Ocado. Intu said the Next beauty hall opening dates have not yet been confirmed. “This new partnership shows how important flagship destinations are to the future of retail. We are very impressed with Next’s ambition for its new concept,” an Intu spokesperson said. “There are many positive movements in retail and confidence within the industry that will see further announcements and good news for our shoppers.”
New Look to switch 402 stores to turnover rent under new CVA proposal
New Look has launched a CVA proposal that entails switching more than 400 of its UK stores to a turnover-based rent model, and also confirmed a financial restructure to reduce its costs after sales were hit by the coronavirus pandemic. Following advice from property agents and a thorough review of New Look’s store estate, the CVA proposal will categorise leases, with 402 leases being set at a turnover percentage of up to 12 per cent and the remaining 68 stores moving to nil rent. Most retail CVAs tend to involve store closures and job cuts, but New Look’s proposal does not affect its 11,200-strong workforce nor does it suggest any sites will permanently shut down. While the vast majority of New Look’s stores have reopened since lockdown eased in mid-June, it recently reported a 38 per cent drop in like-for-like store sales due to the “continued impact of Covid-19 on footfall”. New Look’s CVA proposal also includes enhanced landlord breaks for all stores, providing landlords with the opportunity to exit the lease if they believe they can identify an alternative tenant on improved terms. Meanwhile, New Look will have no additional rights to exit the turnover-based rental agreements until the end of the CVA, and even then only in the event that the store is underperforming. The proposal has been structured to ensure there are no proposed changes to service charges for stores on turnover-based rental agreements and includes the full settlement of service charge arrears across all categories of stores. The CVA, if approved, is expected to last three years.
Co-op Bank slashes 350 high street bank branch jobs
The Co-operative Bank plans to cut around 350 jobs from up and down the country as it closes 18 high street branches and slashes middle management and head office roles. The bank said it has not been immune to the effects of recent months, as low interest rates hit the income of all lenders. More customers are also choosing to bank online, and making fewer transactions in branches, chief executive Andrew Bester said. Bosses promised to try to redeploy staff where possible, and will consult with them and the unions. The 18 high street branches will be closed by December 1 this year.
Retail returns increase as Brits regret lockdown purchases
New research has found that the level of retail returns increased by 25 per cent in July, compared to the same month last year as shoppers sent back unwanted purchases made during lockdown. UK postal service Royal Mail found said the top five areas that saw the most returns were St Albans, Watford, Kingston-upon-Thames, Ilford and south west London. When split into countries, Edinburgh comes out top in the Scotland list and Cardiff takes first place in Wales. Many retailers extended return periods during lockdown, giving consumers more time to make a decision on their purchases. Others have continued to seal off their fitting rooms due to restrictions. The findings are based on analysis of Tracked Returns 48 items accepted into the Royal Mail network in an average week in the time period between June 29 to August 2, 2020. “Having analysed our returns data across our national network of delivery offices, St Albans has emerged as the UK’s returns hotspot,” Royal Mail chief commercial officer Nick Landon said. “With ecommerce playing an important role in keeping the UK connected during such unprecedented times, online returns form an even more important part of the online shopping experience for both consumers and retailers.” Moreover, Royal Mail also found that 53 per cent of Brits felt that receiving parcels became more important during lockdown, while 36 per cent said receiving a parcel was the highlight of their day.
Nike slashes ties with 9 major wholesalers as it pushes to create the marketplace of the future
Nike has cut ties with nine major wholesalers in a bold move which will see its products no longer stocked in over 1000 stores. As part of its relentless shift towards a digital direct-to-consumer model, Nike will reportedly stop selling its products to a host of “strategic partners” including Zappos, Belk, Dillards, Boscov’s, Bob’s Stores, Fred Meyer, EBLens, VIM, and City Blue. Collectively this means that its products will no longer appear in over 1000 stores, marking a major step in its “Consumer Direct Offense” strategy, aimed at driving customers to its own websites. According to Susquehanna International Group (SIG) analyst Sam Poser, this is great news for the sportswear giant as it “takes control of more of its own destiny”. It is also expected to be great news for retailers like Dick’s Sporting Goods, Shoe Carnival and Footlocker which are expected to continue receiving Nike stock. In June Nike said its continued investment in digital services saw online sales rise to 30 per cent of its total revenue for the first time during its fourth quarter. New membership registrations for its apps more than doubled during the quarter to 25 million, and its chief executive John Donahoe said Nike’s digital revenues will reach 50 per cent of all sales “in the foreseeable future”. Donahoe, a former Ebay executive who took the role of chief executive in January, has put digital direct-to-consumer sales at the forefront of Nike’s strategy since joining, moving the company away from its largely wholesale focused model. It had formerly pledged to double direct-to-consumer sales to $16 billion by the end of this year, however at the end of the current financial year they stand at $12.4 billion.
Intu SGS secures £30m to take full control of 4 intu centres
The holding company for four Intu centres, Intu SGS has secured £30 million of new investment and waivers on financial covenants, after Intu collapsed into administration earlier this year. Intu SGS is the holding company for Intu Watford, Lakeside, Victoria Centre in Nottingham and Braehead in Glasgow. Creditors have approved of a new super-senior facility of up to £30 million as well as previously withheld cash to bolster the group’s liquidity. Although Intu continues to manage the centres, Intu SGS is seeking to take full control of its four assets with a full migration expected later this year. “The positive vote today underlines the significant support we have from our creditors,” Intu SGS said. “The proposals that we have agreed today provide us with the stable financial platform to move forward as we continue to recover from the impact of Covid-19. “Creditors have also agreed to inject up to £30 million of new money if required, in a further statement of support.” The four centres are currently at 92 per cent occupancy with 90 per cent of units now trading since the temporary closures during lockdown. The property company has appointed Global Mutual to be asset manager of the four centres and Savills as property manager. Intu collapsed into administration at the end of June but administrators were not appointed to any of its property subsidiaries, including Intu SGS.
Primark launches video game "Primark Legends" where players tidy shelves and mop floors
Primark has launched its very first mobile video game “Primark Legends” where gamers play as a shop assistant at a busy store. Primark Legends is a “fast-paced, shop assistant simulator” which challenges gamers to be the perfect team member in “Primark’s first digital shop”. In perhaps one of the least exciting premises for a video game in history, gamers will have to clean up spills on the shop floor, make repeated trips to the stock room, tidy shelves and help customers find their perfect outfits. The aim of the game is to get a five-star rating by “creating conga lines of happy customers, reuniting shoppers with their lost toys and most importantly… listening to the boss”. Primark Legends, which it says is “the high street’s first mobile gaming app”, is available to download and play for free on Android and iOS from today. While this may be one of the least ambitious premises for a retail video game, it is far from the first. BoohooMan, Burberry, Louis Vuitton, Karl Lagerfeld, Gucci and Adidas all releasing offerings over the past 18 months as brand increasingly see gaming as an invaluable recource to “engage and excite millennials”. According to a recent report from investment banking giant Jefferies, luxury brands are set to drive this unlikely partnership forward over the coming years as they seek to capitalise on the increasingly lucrative market. It argues that the current gaming demographic represent the next generation of luxury consumers, with 46 per cent of the world’s active gamers already spending money in-game.
Amazon opens its first ever fresh physical grocery store
Amazon has opened the doors to its first ever full-size grocery store in Los Angeles marking its most significant venture into physical retail to date. Its new Amazon Fresh Store opened its doors yesterday morning to a select number of customers which it has invited from the local area, and will open to a wider audience in the coming weeks. Seeking to differentiate its new format from its upmarket WholeFoods stores and its smaller Amazon Go convenience stores, Amazon Fresh will be stocked with a much wider range of supermarket staples. The 35,000sq ft store will stock big brands like Coca-Cola and Kellogs, its own brands including Happy Belly and Cursive wine, alongside a range of organic items from WholeFoods, which it purchased in 2017. “Whole Foods is a longstanding pioneer and leader in natural, organic and clean foods,” vice president of Amazon Fresh stores Jeff Helbling said. “Amazon’s Fresh selection is fairly different. We see them operating next to one another and we’re excited to offer customers the choice between the two.” While it won’t come with inbuild AI-driven cameras which can detect what shoppers’ pickup like its Amazon Go stores, Amazon Fresh still comes with a host of boundary-pushing technology. Amazon will roll out its new automated “Dash Carts” which use computer vision and inbuilt scales to identify items and charge customers without them having to visit a cashier.
Pret a Manger slashes 2800 high street jobs
Pret a Manger has axed 2800 from its chain of high street shops after completing a restructuring of its UK business. The cuts come after the high street chain said last month that it was planning a shake-up which would result in the closure of 30 sites. Pret a Manger said that although there have been “clear signs of recovery” in footfall since the lockdown was eased – with sales up seven per cent each week since July – trade across its UK shops was still around 60 per cent down year-on-year.
UK Halloween searches surge as consumers look beyond pandemic
As UK retail attempts to recover from the blow dealt it by the country’s lockdown, key shopping events are a big focus and following news that consumers seem to be shopping early for Christmas comes a report that Halloween is also generating earlier-than-usual interest this year. E-tailer Notonthehighstreet (NOTHS) said the shopping season could be the biggest yet with searches for halloween up 889% week-on-week and the word being in its top five search terms. The search increase and volume on NOTHS are at levels usually only seen in October rather than late August. The company, which carries products from 5,000 small creative businesses, said the Halloween spike is “an opportunity for independents from across the UK to tap into changing consumer demand and mindset ahead of the Christmas peak”. The company’s commercial director Leanne Osborne thinks the pandemic has forced “us to look at alternative options to the traditional trick or treating” and that this is driving the current activity. The almost-900% increase in search traffic is something that would usually happen in the week leading up to halloween itself. But shoppers are currently searching for a variety of goods including unique food and drink, partyware, decorations, games & activities and clothing & accessories at unexpected levels. Such searches usually start to rise in mid-September, but this year the increase began in early August. “October half term will also be the first opportunity for families to reconnect after the children return to school, with many parents looking to recreate the fun and sentiment behind Halloween at home,” the company said.
Restaurants extend discount dining into September
Restaurants say they will continue to offer the Eat Out to Help Out scheme in September, funding it themselves, because it has been so successful. The government scheme offers customers 50% off their meal, up to a maximum of £10 during August. But chains such as Pizza Pilgrims now say they will offer the discount next month too. The aim is to draw people nervous about coronavirus back to restaurants at a time when many are struggling. Some 84,000 restaurants, cafes and bars have signed up to the government's scheme, which runs on Mondays, Tuesdays and Wednesdays in August. According to the latest Treasury figures, diners used it more than 64 million times in its first three weeks - equivalent to nearly every person in the country dining out. Commercial landlord Grosvenor - which owns property across central London - said it would reduce rents for tenants that continue to offer diners half-price meals until the end of September. High end restaurants Comptoir and Roka, the Thomas Cubitt pub and Peggy Porschen café are among those to sign up. "Eat Out to Help Out has been a powerful tool in protecting jobs and local economies UK-wide and we are working hard to help the West End and our tenants recover," said Amelia Bright, executive director of Grosvenor's London estate. "Continuing it will not only support cafes, restaurants and bars that we lease space to but also help welcome back more visitors and workers to Mayfair and Belgravia."
Article of the week - Amazon opens its first ever fresh physical grocery store
Question of the week - Has "Eat out to help out" kick started a recovery for High Streets and Shopping Centres?