It’s the news the industry dreaded. This Thursday so-called ‘non-essential’ retail will be shut down until December 2 in a bid to stem the spread of coronavirus. Many fear chaos, but could click and collect come to the rescue?

  • Retail Economics forecasts that the four-week lockdown in England will lead to a £6.75bn decline in non-essential retail sales
  • John Lewis, Next, Lush and The Entertainer are among those “absolutely throwing everything at click and collect” – but it’s not viable for all retailers
  • Primark’s John Bason says retailers must be allowed to extend opening hours when shops do reopen to make up for lost time

The impact of another lockdown in the middle of the golden quarter is likely to be heavy. 

Next chief executive Lord Wolfson forecast last week, prior to the latest measures being announced, that two weeks of mandated closures across England, Scotland and Northern Ireland would trigger a 20% drop in full-price sales. That might now prove over-optimistic. 

Primark, one of the high street’s most successful retailers, anticipates a hit of £375m in lost sales.

British Retail Consortium (BRC) chief executive Helen Dickinson says the previous lockdown “cost non-essential shops £1.6bn a week in lost sales; now that we are entering the all-important Christmas shopping period, these losses are certain to be much bigger”.

Lending weight to that view, Retail Economics forecasts that the four-week lockdown in England will lead to a £6.75bn decline in non-essential retail sales.

Reaction among retail executives was mixed. One senior retailer said that the industry had been blindsided because the latest restrictions, confirmed over the weekend, contradicted conversations that were had with government officials just days before.

Another retail leader says: “Given how much we’d all invested in making shops safe, while I’m supportive and resigned that the prime minister had to make the decision about the lockdown that he did, I do think it would have been an option to run non-essential retail.

“The BRC’s data is clear – non-essential retail wouldn’t on its own make a huge difference to transmission rates.”

“If the information from experts is true, it is not reasonable to keep retail open and risk the NHS falling over” 

Gary Grant, The Entertainer 

Toy specialist The Entertainer’s chief executive Gary Grant agrees that the money spent on making stores safe in the wake of the pandemic make the November closure particularly disappointing. However, despite that, he believes the government’s decision to shutter non-essential stores is the right one.

“If the information from experts is true, it is not reasonable to keep retail open and risk the NHS falling over, ” he maintains. ”I would have made the same decision – it’s a really difficult one and not something that will have been taken lightly.”

Surge in demand

One small solace for some retailers has been a surge in demand, both online and in-store, in the wake of the second lockdown announcement.

John Lewis operations director Andrew Murphy says demand over the weekend was “very strong” as shoppers bought Christmas items early, which he hopes will reduce the severity of strain put on the retailer’s online operations in coming weeks.

The entertainer

The Entertainer has seen increased demand over the past few days

Grant agrees: “Our store trade is absolutely flying – I think people are responding to the lockdown measures and realising that if they don’t physically buy toys over the next couple of days we, and couriers, almost certainly will not be able to manage the online volumes by Christmas.”

In response to this demand, The Entertainer has extended opening hours across the bulk of its store estate to capitalise on in-store sales prior to lockdown. Dixons Carphone business Currys PC World is doing the same. 

The lockdown regulations this time around do allow non-essential retailers to offer click-and-collect services, which many are planning to take advantage of – although details of what exactly will be permitted were not known at the time of writing.

“Click and collect is over half the volume of JohnLewis.com at any time, so that is a real boost for us”

Andrew Murphy, John Lewis

Murphy says John Lewis will continue to offer click and collect across 320 Waitrose branches and 500 Co-op shops but plans to offer the services from its 42 department stores as well.

“Click and collect is over half the volume of JohnLewis.com at any time, so that is a real boost for us,” he says. ”We absolutely intend to run it from our own shops.

“The practicalities are much easier in some than others as they have shopfront access, huge storage areas, parking bays. Others are more complicated in city-centre locations, but our initial assessment is that technically there are none we can’t run. 

“There may be a couple that, when we see customer demand, we might choose not to, but overall we are feeling good about that.”

Next also intends to run a click-and-collect service from 300 of its 390 branches, stressing that shoppers will stay outside the store at all times while orders are retrieved by a member of staff. 

Lush retail director Claire Constantine says “all shops will be running an ‘order-and-collect’ service, and many will be providing local delivery and online consultations”.

Grant says the Entertainer will be “absolutely throwing everything at click and collect” in a bid to offset pressure on its couriers and distribution centres.

The limits of click and collect 

But there are other retailers, particularly in fashion, who say click and collect is not an economically viable option for them.

The boss of one mid-market fashion retailer, who forecasts that lockdown will cause full-year sales to slide from 30% down year on year to as much as 50%, says the operational complexity of keeping stores open for click and collect means offering it during lockdown would be “nonsensical and irresponsible”.

Ann Summers boss Jacqueline Gold echoes that view and says “the numbers don’t add up” for her business to run click and collect during lockdown.

Retail Economics forecasts the closure of shops during November will result in around £2.9bn of retail sales shifting online – a switch that even the most seasoned online retailers will struggle to cope with.

Amazon’s chief financial officer Brian Olsavsky expected that, even before taking lockdowns into account, capacity would be “tight” across its markets.

“We’ll all be stretched,” he says. “It’s advantageous to the customer, and probably to the companies, for people to order early this year.”

Some retailers offering click and collect during lockdown have flagged that the pressure store closures will put on their online operations will be substantial. 

JLP Oxford Street fascia 2018

John Lewis intends to make the most of click and collect

“Even for a £2bn online retailer like us, this is going to be a massive capacity strain coming at the time of year that it does,” says Murphy.

“I can’t deny capacity strain, all things being equal, will be really severe – but if enough demand is pulled forward and we have decent availability and ability to get products to customers in a number of ways, we feel pretty resilient and optimistic.”

But bosses of smaller retailers have expressed concern about being able to increase already stretched online capacity to cope with festive demand now that shoppers cannot visit stores.

“We will be dealing with potentially significant volumes and will need to get in the right staff to plug gaps, which is hard because other bigger retailers will be doing the same thing, as well as booking couriers,” says Gold.

A month – or longer?

Retailers are also having to grapple with the possibility that, despite Boris Johnson’s pledge that lockdown should not extend beyond December 2, that may not end up being the case.

Murphy says John Lewis is working according to three scenarios – shops reopening on December 2, December 16 or ”later”. 

“This government has a history of drip-feeding information. But we need answers so we can plan”

Jacqueline Gold, Ann Summers

“I’m not confident, and I can’t see what can be achieved [to suppress the virus] in four weeks,” says Gold.

“This government has a history of drip-feeding information, which to an extent I understand because you don’t want to give people relentless bad news. But for our industry it doesn’t really work – we need answers so we can plan.”

Primark’s finance director John Bason says retailers must be allowed to extend opening hours when shops do reopen to make up for lost time in terms of Christmas trade.

“We’d look for longer opening hours. There will be big demand. It’s busy enough at Christmas in normal times, never mind now. It’s not about creating crowds; it’s about managing and spreading demand,” he says.

M&S is also introducing bookable 30-minute slots for Sparks loyalty cardholders to shop during lockdown in a bid to control numbers. 

M&S stores director Helen Milford says: “With winter ahead, we know customers are increasingly concerned about queuing so, in response, we wanted to deliver a quick digital solution to help them shop. 

“Customers will always be able to visit M&S without a slot, but we hope this is a small way we can help make things a little easier for our customers.”

In a year when retailers have risen to the challenge, time and again, they face their biggest hurdle yet to ensure a happy Christmas.