After three months of shuttered doors due to the coronavirus, English non-essential retail reopened to the public on Monday. Retail Week analyses the lessons to be learnt from the first days of trading.

  • High street retailers fear momentum will not be maintained once pent-up demand is satisfied
  • Superdry boss Julian Dunkerton says UK store openings have “outperformed all other European openings”
  • Springboard warns “the shine is going to come off pretty quickly” of stores designed for social distancing
  • Hammerson and Intu bosses pleased with the performance of shopping centres this week

Much has changed since Boris Johnson shut down the UK on March 24. In the intervening months, the economy has ground to a halt, tens of thousands of people have died of Covid-19 and social distancing has become the norm.

Primark Birmingham

Primark saw long queues at stores across England as they reopened

In this strange new world, English ‘non-essential’ retailers began to reopen stores on Monday. With many national chains choosing to take a phased approach to reopening, June 15 was always going to be more a symbol of progress rather than a return to normal – new or otherwise.

While pictures of snaking, socially distanced queues outside of Primark, Sports Direct and Zara stores up and down England led the national news, many customers chose to stay away. Those who were out cut wary figures, many clad in masks.

While it is early days, what can the first few days of trading tell us about the future of the store in a socially distanced world? As lockdown begins to ease and people begin to feel the first pinches of the impending recession, how will the consumer change?

First impressions

Footfall figures provided by Springboard for Monday showed encouraging signs. Across all destinations, footfall was up 41.7%, compared to the previous week.

High streets enjoyed the biggest footfall resurgence, up 51.7%, while shopping centres saw a 37% increase and retail parks, the most resilient shopping destination throughout lockdown, saw a 25.1% uptick.

However, while the week-to-week comparisons were encouraging, year-to-year footfall across all destinations was down 34.2%.

Dreams_instore

Dreams has brought in single-use pillow and mattress protectors for customers

While many retailers would understandably have been nervous about their first day reopening, Superdry chief executive Julian Dunkerton says UK store openings have “outperformed all other European openings”. He notes that while different countries have opened at different levels, ”the UK is the first to open with full price positive like for like sales”. 

Springboard insights director Wehrle predicted that shopping centres, with their large, enclosed spaces, expensive parking and food and beverage and leisure components still closed to the public, might struggle.

”Shopping centres will find it increasingly difficult. After the initial shine of getting out of the house and going to shop wears off, having to queue up and not being able to interact with the products and so on, the shine is going to come off pretty quickly,” she says. “Malls will have it harder if things don’t ease because part of the experience is about having a coffee and eating something and we can’t do any of that”.

However, Brent Cross and Birmingham Bullring operator Hammerson’s UK and Ireland boss Mark Bourgeois was pleased. He says queues formed at centres from 8am and retailers “across our portfolio in footwear, childrenswear, electronics and summer fashion categories” saw sales spikes.

Intu centre performance director Martin Breeden agrees. He says the longest queues were seen at Intu Metrocentre’s Primark in Newcastle, which at one point in the morning had a 500-strong queue.  

Breeden expects footfall to continue to inch up as more stores reopen. On Monday, just 40% of non-essential operators were trading on Intu sites.

“We’ll look to double that quickly to around 80% or 85% over the next week to 10 days,” he says.

Pent-up demand

While more value-led fashion propositions reported queues wherever they reopened, other categories such as DIY, department stores and homeware retailers also saw pleasing first-day trading.

Chief executive of specialist retailer Dreams Mike Logue was encouraged by early customer appetite.

Lush shop sign

Lush expects more regional than national trends to emerge

“With people maybe not considering a holiday they maybe are considering bulkier purchases. With people spending so much time at home I think we will see home purchases increase, certainly for the next month or so due to significant pent-up demand.”

Card Factory chief executive Karen Hubbard also says she was “encouraged” by trading at the 89 stores the retailer reopened on Monday. “We expected some pent-up demand and we saw strong footfall on the high street and in retail parks”.

The big question for retailers remains whether this initial sales flurry will be sustained, or whether, as demand is satisfied, it will fall away.

As one high street source worries: “We had a good day, but there is a sense that there was pent-up demand like the first day of a Sale. But will we maintain that momentum in the weeks to come? We are not sure and we’re not banking on it.”

“Our customers don’t feel comfortable going far from home or getting on public transport. They’d rather shop in a store they can walk to or park outside of”

Phil Briggs, Tofs

Springboard figures from Tuesday show a dip across the board in terms of footfall growth week on week compared to Monday. All destinations saw a 26.7% uptick week on week; however, high streets enjoyed the biggest footfall growth, up 33.6%.

Wehrle predicts that retail parks and more regional and suburban high streets will continue to drive footfall and by extension retail sales growth in the weeks and months to come.

Chief commercial officer at The Original Factory Shop, Phil Briggs agrees and says “being local and part of the community” was a big help to the retailer not just when it reopened on Monday but looking ahead.

As he explains: “Our customers don’t feel comfortable going far from home or getting on public transport. They’d rather shop in a store they can walk to or park outside of.”

Lush retail director Kat Hannible says this local focus is here to stay. The retailer’s local store managers are “starting to collaborate and learn together and we are going to see more regional than national trends.

“What product is popular in a certain area and how nervous customers are in London versus Dorset is going to be very different.”

Changing customer behaviours

While footfall continues to be broadly subdued, retailers from Reiss to Dreams noted that those who came into stores were determined to buy.

Group operations director at John Lewis Andrew Murphy sums it up: “The shopping is highly mission-geared, it’s not just browsing. People have got purchases in mind, so conversion is very good”.

For TOFS’ Briggs, the coronavirus pandemic could play into the hands of the department store sector, which has struggled to adapt to ecommerce penetration in recent years. 

Briggs says footfall was up year on year, which he thinks “might come down to the locality of our stores” and broadness of their range – they are walking distance from their shoppers and sell across a lot of categories, so people could walk there and get most things on their non-essential shopping list. 

Fenwick retail operations director Pablo Sueiras agrees and says department stores might also have an advantage over other retail destinations given the size of stores to accommodate social distancing. 

“Department stores are actually a great environment to shop in in this situation. We’ve got very wide walkways, so even if someone is walking the wrong way you can very easily step on to a mat that is not congested with fixtures,” he says. “Other stores perhaps won’t benefit from that and that might make retail overall less of an enjoyable experience.”

“We expect that when a lot of our neighbours reopen things may get a little busier and a little trickier outside our shops”

James Daunt, Waterstones

However, as more stores across England begin to reopen, retailers are concerned about what effect that might have on customer’s psyches. Waterstones chief executive James Daunt says many of the retailer’s locations could be affected by spillover queues outside stores.

“We expect that when a lot of our neighbours reopen things may get a little busier and a little trickier outside our shops. Queueing now isn’t an issue as there’s plenty of pavement space, but this might change when all the shops reopen.”

To guard against customers being put off by queues, John Lewis’ Murphy says the retailer now has ‘customer hosts’ outside stores “engaging with people in the queue, chatting to them, making them feel welcome and answering their questions”.

Looming large too for the consumer is the recession, the effects of which retailers believe people will feel more as society begins to reopen.

As one high street operator says: “It’s going to be a bloody tough year for retail. There’s definitely going to be a flight back to value – that was certainly where the queues were on Monday.”

Socially distanced experience

As ecommerce has grown and chipped away at customer footfall in-store over the last few years, the predominant pre-coronavirus focus for many retailers was offering unique in-store experiences and services that shoppers couldn’t get online.

Hannible says the new measures have presented issues for Lush. She says while customers want a tactile and experiential shopping environment in-store, Lush staff don’t “want to be seen to be touching products too much in front of customers”. This makes product demonstrations very difficult.

Next Orpington 04

Browsing is expected to be out of favour in socially distanced stores

Waterstone’s Daunt says the retailer has implemented a 72-hour book quarantine system, meaning customers can still browse items without fear of them contracting the virus.

Homewares specialist Heal’s has been offering “exclusive experiences” for customers looking to avoid queues, opening the first hour of store trading for private appointments. It has also launched a virtual consultation service for people who do not want to come into the store.

Dreams has been putting in place one-use pillow and mattress protectors for customers, which Logue says has made shoppers more “confident” to both try and purchase items.

“We always said that we didn’t want to overly rely on signage – it’s quite exhausting for people to read everything and make sure they are constantly looking at arrows on the ground”

Pablo Sueiras, Fenwick

For all these efforts, TOFS’ Briggs believes in-store browsing has fallen out of favour for many shoppers now and in the near future.

“[Shoppers] want to be in and out quickly when they are in they are spending – every person in-store translates to sale and they are spending more than they were this time last year,” he says.

Many retailers, even those with large stores, are doing their best to avoid customers bunching up either at certain departments or parts of a store.

John Lewis’ Murphy says its Kingston menswear department had this problem on the first day and says the retailer is still working out how best to manage that ahead of reopening some of its busier stores.

Fenwick’s Sueiras says the retailer has effectively followed a hotel model, having a concierge at the front of the store to “put customers at ease and reassure them”. He also says this decreases the need for customers to spend their shopping trip reading signs, which he says is “exhausting”.

“We’ve got signage, we’ve got floor markings, but we always said that we didn’t want to overly rely on signage – it’s quite exhausting for people to read everything and make sure they are constantly looking at arrows on the ground.”

While it is hard to divine too much from a few days, retailers are already picking out trends they believe will persist.

Hannible says Lush is already seeing customers being “more discernible” with their money, which could pay dividends for sustainability. ”I’d love to see customers making more informed purchases and I’d hope for brands to be challenged on that and held accountable,” she says.

Dunkerton says the trend of local high street stores picking up the slack will continue, while “places that relied on tourist spend have struggled and are going to struggle”. 

Ultimately, John Lewis’ Murphy believes the great retail legacy of coronavirus might be that it even further polarises online versus in-store shopping: one for convenience, the other for experience.

“I think it’ll change how much value people place on the things you can never do online – the smell of the perfume, the feel of the fabric, the colour matching of two items, the opportunity to ask 15 questions to a knowledgeable tech salesperson. These things will be more appreciated. Once the virus threat is fully behind us, I think that will return in spades,” he says.

It is clear from recent days that customers have missed shopping in-store. The challenge for retail in the coming weeks will be giving them reasons to maintain that enthusiasm by offering them an experience that, unprecedented circumstances notwithstanding, scrolling through a website cannot.