Since the coronavirus pandemic began in 2020, news from the retail sector has been bleak. And while a new year has brought new hope for a return to something more akin to ‘normal life’, many businesses have gone bust, companies have struggled to stay afloat, and brands have had to do whatever they could to stay relevant.
But, for all the doom and gloom, some have weathered this particular storm rather well. So, who’s come out of 2020 in good shape – and why?
Are you not entertained?
A common theme of the Covid-19 era success stories has been the home. Amid the lockdowns we’ve all spent much more time inside, so it makes sense that businesses driven by our need to be entertained have done rather well.
Big-ticket electronics, like TVs and stereo systems, enjoyed a boost – especially as many consumers chose to make these sorts of purchases with the savings they would otherwise have splashed out on a holiday they couldn’t take.
One of the biggest bumps has been in gaming, though. According to research institute GfK, well over half a million games consoles like the PS4, Nintendo Switch or Xbox One were sold as the UK entered the first national lockdown in March/April 2020 – that’s almost 50% more, year-on-year.
At the beginning of the second lockdown in November 2020, game sales rose 13% week-onweek – a significant change, given there were no major game launches (unlike the week before) – and two major new console releases completely outsold demand. Stocks of both the Xbox Series X/S and the PS5, as well as the latest Call of Duty title, disappeared almost as soon as they’d gone on sale – demonstrating how robust this market has been while consumers have been cooped up inside.
With more time at home, many people have looked at their surroundings and found ways to make improvements. The obvious way has been a spot of DIY, where retailers had the additional boost of being designated as essential businesses who could remain open during the lockdowns.
Kingfisher – the parent company of DIY giants B&Q and Screwfix – reported its June 2020 sales to have been up by a quarter, year on year – as homeowners took the opportunity to do up their new ‘home office’, or simply spruce up the place they’d be spending a more significant amount of time.
This boom wasn’t just restricted to the mainstream market, though. Premium paint manufacturer Farrow & Ball’s chief executive Anthony Davey told the Financial Times their UK business had grown “by in excess of 40 per cent” in 2020, compared with 14 per cent growth pre-pandemic. He cited smaller online orders as a big part of this success because people want their “new frontier” of the home – which now often doubles as an office or a school – to “make a statement” about themselves.
Similarly, furniture retailers across the board – from high street chains like Dunelm and DFS to higherend names like Loaf – all reported healthy sales figures for 2020 too. Dunelm’s August sales were up by 25% compared with 2019, as the holiday savings went on new furniture to go with that new TV or music system.
Pedalling, preening and percolating
On the subject of ‘doing it yourself’, some of the other major beneficiaries of the lockdowns have been driven by consumers cutting out frills as part of their post-pandemic lifestyle changes. Trying to find new ways to exercise, while avoiding public transport and without committing to a new car, means cycling has enjoyed a major revival. Halfords reported sales of bikes had jumped by as much as five times their pre-pandemic levels as people turned to pedal power to get around.
The beauty industry has taken some major hits this year, with beauty salons and hairdressers forced to close and make-up sales plummeting due to enforced isolation – but, again, it’s not been all bad news. Industry leader L’Oreal reported a 30% increase in sales of home hair colouring during the spring 2020 lockdown, despite the beauty market contracting by around 14% overall.
Another thing being taken in-house (quite literally) is coffee-making. Instead of popping to the local café for their latte, consumers are doing their own thing with caffeine giant Nestlé seeing fresh roast coffee sales climbing by a third in the last year.
So, while there have been many casualties of the pandemic – and more are sure to follow in the years ahead – there are also bright spots. Some businesses have taken advantage of changing demand, while others have adjusted with new strategies and look well set to survive and thrive in the new retail landscape.
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