Retail Armageddon – Non Food

In my last post, I considered some of the best and worst behaviours we have seen in food retailing during the COVID-19 crisis to date.  Now we have the Government lockdown and the splitting of retailing into essential and non-essential shops, or pretty much food and non-food (whatever Sports Direct thought).

The Government’s announcement and forced closure effectively consolidated much of what was already underway in non-food retailing.  As people began to stay away from many towns and footfall fell, and as consumers transferred their spending to toilet paper and canned and dried goods in food stores, so sales in non-food collapsed.  The thought of – and now reality of – being housebound for weeks is not exactly conducive to clothing, fashion and other sales.  As Next stated “people do not buy a new outfit to stay at home”.

So non-food retailers began to close stores and to think about their futures.  Some are doing the decent thing in response to indications about the Government’s business support package and are keeping on, paying and looked after their employees, at least in the short term.  Others closed stores and basically disposed of their staff.  I can understand the need to close stores as demand collapsed (though some I feel used this as cover) but given the support for the economy underway, simply walking away from people is unforgiveable at this time.

For many of these non-essential non-food stores the decision was made ahead of the Government’s lockdown.  Some though apparently tried forcing employees to work when they did not want to and when it looked unsafe (yes, Waterstones).  Others claimed they were indeed essential (Sports Direct unsurprisingly, and they’re really not).  It really beggars belief in the circumstances.

Some of these non-food retailers will struggle, if they are shut down for an extensive period, to recover their store portfolio and we may well see a major consolidation, accelerating existing trends.  Some will not survive the shutdown.  Smaller non-food retailers will, unlike their food counterparts, be less resistant to the problems caused, despite help on offer. It is a very worrying time for many businesses.

It is possible that more non-food will move online.  For those that had a strong online presence, this may be something of a respite or protection, but it is not a panacea, though does offer a channel to the market (as Next have shown).  But again we may see an acceleration of the pre-existing trend as more retailers move or develop their online offer, and more consumers turn to online shopping. Whether consumers are fully in the mood to buy remains uncertain and highly unlikely though (beyond some specific product areas). It is clothing and fashion that may be most damaged.

We should also spare a thought for suppliers and landlords (yes, I know).  When M&S and Primark cancel their order book you know there is major pain at production as well as at retail.  As stores close or retailers refuse to pay rent so landlords will be hit.  Many retailers want rent relief to go with the rates relief; another kick for the CVA type restructuring and rent holidays seen in recent years. The effects are going to reveberate for a long time and in many dimensions.

A propos the recovery after Covid19, when this is over and you fancy a pint, please reflect on these contrasting approaches:

 

Fullers commit to not charging rent and Wetherspoons pay off their staff with immediate effect and tell them to go and work in Tesco. You pay your money and you take your choice, but there is a price to pay for decency.

Overall, as we said in the previous post, food is under massive stress but in a big (temporary) boom; non-food is something of a disaster zone.  In the next post I try to reflect on what this might mean for the future.

About Leigh Sparks

I am Professor of Retail Studies at the Institute for Retail Studies, University of Stirling, where I research and teach aspects of retailing and retail supply chains, alongside various colleagues. I am Chair of Scotland's Towns Partnership. I am also a Deputy Principal of the University, with responsibility for Education and Students.
This entry was posted in Amazon, Closure, Consumers, Covid19, CVA, Employment practices, Fashion, Government, Landlords, Online Retailing, Rents, Retail Change, Retailers, Retailing, Shopping Centres, Sports Direct, Suppliers, Uncategorized, Wetherspoons and tagged , , , , , , , , , , , , . Bookmark the permalink.

3 Responses to Retail Armageddon – Non Food

  1. Pingback: Retail Armageddon – Non Food | Public policy blog

  2. Pingback: Christmas and more in March – but only for some | Stirlingretail

  3. Pingback: Scottish Retail Sales: seeing the impact of Lockdown | Stirlingretail

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