As the first year of the Covid-19 pandemic has been and gone, John Lewis has become the latest retail giant to announce huge losses, putting shops and thousands of jobs at risk. As more and more shops and outlets are closing, will the face of the high street ever be the same again?
Breaking habits of a lifetime
Over the last financial year, John Lewis has estimated that for every £10 spent on their website, just £3 was driven from customers visiting shops and buying later at home. Traditionally this figure was £6, leading the company to rethink its approach to its online presence.
As more and more customers go online, a decade of shifting habits has been hugely accelerated by the last years’ multiple lockdowns, market uncertainty and logistical problems caused by this.
For example, in March 2021, John Lewis announced losses of £517m – this compares to a profit of £146m the previous year.
All of these factors mean companies like John Lewis, with a massive high street presence in most towns and cities in the UK, are having to rethink how many shops they need to be sustainable.
By 2025 it is estimated 75% of sales will be made online.
Lining up online
As the pandemic caused us all to spend more time indoors and away from the shops, retailers with strong online capabilities and presence saw their sales surge over the last 12 months.
On average, supermarkets saw online grocery sales increase up to 17.5% in 2020 with people stocking up on essentials during the lockdowns.
The uptake in online sales wasn’t just restricted to food, with many online retailers seeing sales revenue increase massively.
This is a trend that has been followed worldwide, with online sales in some sectors increasing by up to 141% and total revenue increasing by nearly $700bn to $4,2tn – that works out as over $567 for each and every person in the world spent on online shopping!
Counting the cost of COVID
However, due to increased costs in relation to Covid-19 and the extra steps companies had to undertake in order to remain safe, many companies saw profits fall massively as the economy saw its biggest ever fall since records began.
The Office for National Statistics (ONS) said that “The UK economy shrank by a record 9.9% last year as coronavirus restrictions hit output, official figures show. The contraction in 2020 was more than twice as much as the previous largest annual fall on record”
As people were told to Stay at Home to Protect the NHS companies were forced to close their doors and enable people, where possible, to work from home. In a lot of industries this just was not possible, so thanks to the Job Retention Scheme (Furlough) the UK Government and politicians have managed to mitigate the damage to the economy by paying 80% of peoples’ wages for the hours they cannot work.
This step helped protects millions of jobs and should enable the economy to bounce back once the pandemic is over.
Partnerships being forged
Lockdown measures have almost reignited a kind of “blitz-spirit” among members of the community.
This has also passed over into retail with many companies now forging partnerships where they might not have otherwise seen the opportunity.
For example, March 2021 saw the unprecedented step of Marks and Spencer’s announcing they will begin to sell rivals’ products on their clothes websites in order to boost online sales.
March 2021 also saw Next take a 25% stake in fashion brand and retail store Reiss. The majority of the partnership will focus on the 2 companies’ online presence and platform, warehouse, distribution and logistics in order to streamline their business, again, to cater for the changing face of the high street.
Online women’s fashion brand Sosandar has signed a new partnership with Marks & Spencer to go with the partnership deals it has struck with John Lewis and Next.
As the move to more and more online shopping becomes increases, so does the need to take online security more seriously.
Inexperienced shoppers can be duped into purchasing products that don’t exist, or giving away their personal information which can then lead to theft, both physical and identity.
Check out this article on PC Mag website for more information on Online Security and for some tips on how to be safer.
QuidMarket, Covid and Remote Working
Here at QuidMarket we are an online lender and have been trading since 2011 – therefore, all our systems, working practices and policies were designed to operate online so our day to day running of your accounts and your information has not been affected by the pandemic at all.
Our staff are still dedicated to bringing you the highest level of service and support we can. All our staff began working from home last year so if you contact us, you might hear background noise, such as children or pets – please don’t be alarmed as we are still working as professionally as ever.
Help and Advice
If you or your finances have been affected by the pandemic you can view the dedicated Help and Advice section of our website.
If you feel your problems are more wide ranging and long lasting you can find details of various organisations offering different levels of support.
Or, if you need help or advice on how to speak to, or deal with, the various creditors you have and you are in a position to speak to them yourself then you can phone the National Debtline on 0808 808 4000. They can also offer budgeting advice and have an online tool call My Money Steps.