RETAIL FORECASTS REPORT 2021 | BDO LLP
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KEY SECTORS IMPACTED AND EXAMPLES Fashion – With consumers reining in spending and not going out as much, clothing has borne the brunt of the fall in retail spending. The loss of an almost entire spring/summer season has left many retailers with huge amounts of out of season stock. Consequently, many retailers have paused or substantially reduced buying, thereby impacting those in the supply chain of this sector. Stockpiling of out of season stock has led to extensive sales by many major retailers, with Harrods even opening a temporary outlet store at Westfield London to help shift out of season stock. Health & Beauty – While a consumer focus on wellness has benefitted Health retailers, Beauty retailers have suffered from lockdown causing a huge fall in demand for categories such as make-up. However, amid trends such as a switch to Zoom meetings over real life ones and the necessity of wearing face masks, some products, such as eyeliner, have proved more resilient than others, such as lipstick. Home – While the pandemic has understandably invoked a cautiousness around committing to big ticket purchases, at times this has been outweighed by consumers with increased time spent at home wanting to invest in overhauling their living spaces. SCS, for example, saw order intake increase by a massive 51% for the six weeks to 5 September 2020. This boom is set to continue until the end of the stamp duty holiday in March 2021 but, barring an extension on further intervention, this point could present somewhat of a cliff-edge for the housing market and home retailers. DIY & Gardening – Similar to Home, DIY & Gardening has benefitted from consumers, with increased time at home, wanting to improve their homes and gardens, as well as a willingness for consumers to take on tasks themselves rather than getting tradesmen in. In evidence of this, both B&Q owner Kingfisher and Travis Perkins owner Wickes reported double digit year-on-year sales increases for May and June, with Screwfix set to open 30 new UK stores by 2021.
Electricals – With consumers spending more time at home amid the pandemic there has been a surge in demand for items such as home office technology, small domestic appliances and fridge freezers. Omnichannel specialist Dixons Carphone has been well placed to capitalise on this rise in demand, with UK & Ireland with LFLs increasing 12% in the 17 weeks to 29 August 2020. As consumers continue to re-evaluate their lifestyle over the coming year, electricals retailers will be best positioned to continue to meet demand for the gadgets and products that will be needed for their new routines. Grocery – As the seriousness of the pandemic became clear shoppers stockpiled items such as canned goods and toilet paper, buying more food & grocery than they really needed and causing a rare spike in volumes of sales. Flowers were also popular and were among the top three most common items purchased during lockdown, according to figures from Barclaycard. Searches for flowers jumped to almost 300% during the same period. Morrisons also announced it would recruit 180 professional florists for its stores to help meet the rising demand. As the crisis has worn on food & grocery retail, sales have continued to benefit from consumers reluctant to eat out and cooking and eating at home more.
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