Retail
Think tank Social Market Foundation (SMF) has released a new report which claims that high streets should be turned into housing rather than shops. With increases in employees working from home coupled with the huge increase in online shopping accelerated by the covid-19 pandemic, empty shops should be torn down to create more town and city-centre accommodation according to the foundation. The SMF state that the decline of the high street can not be undone simply by trying to “turn the clock back” to a time before online shopping was popular.
The government is calling for evidence on possible future reform of business rates in a bid to “reduce the overall burden of the system on businesses". The call for evidence is open until October 31st and stakeholders are being asking to comment on:
- The current system of reliefs and exemptions strikes the right balance and targets the right businesses;
- Whether relief should be set centrally or by local government;
- Whether there should be changes to the controversial Check, Challenge, Appeal system;
- An entirely different alternative to business rates should be considered, including an online sales tax and a capital value tax.
A 3.37% stake in embattled fashion brand Superdry has been bought up by activist investor Gatemore Capital. Managing partner Liad Meidar said: “Superdry has shown strong resilience despite a challenging trading environment in recent months, and we are confident the business is poised to benefit from the trend towards casualwear which has been accelerated by Covid-19. We are fully supportive of Julian’s vision for the company, including returning the brand to its design-led routes and Superdry’s strong commitment to sustainability.”
Matalan has announced losses of £35.8m in the 13 weeks to May due to the pandemic which Matalan CEO Jason Hargreaves has described as “the biggest challenge ever faced by the sector”.
The grocery market has grown at the fastest rate since records began in 1994, according to figures from research firm Kantar. Take-home grocery sales increased by 17% in the 12 weeks to July 12th. However, since the hospitality sector reopened, sales have fallen, up by 15% year-on-year for the past month. Kantar’s head of retail and consumer insight Fraser McKevitt said the reopening of the hospitality sector had already led some consumers to revert to more normal habits. “As lockdown restrictions are gradually eased and non-essential retail outlets reopen, some consumers are slowly resuming their pre-Covid routines and shopping habits,” he said.
Marks and Spencer has announced that it will cut 950 jobs in a huge restructure as part of its ‘Never the same again’ programme in a bid to turn the stalwart business around. A spokesperson for M&S said that the programme will “create a new retail management structure that is fit for the future – removing role duplication, providing clearer leadership accountabilities and freeing up retail teams to focus more on the customer”.
John Lewis has announced that it plans to extend its click-and-collect partnership with the Co-op by making returns and collections services available across more than 500 Co-op stores. A phased rollout has already begun and will be completed by September. A spokesperson said that the roll out was “part of the partnership’s plans to invest in digital capabilities and collaborations which make the shopping experience".
US retail giant Walmart has restarted conversations about selling its UK supermarket arm, Asda after talks ceased due to the covid-19 pandemic. Last year the CMA stopped plans to merge Asda and Sainsbury’s over concerns that a deal would increase prices for consumers.
Azzurri Group which owns brands including Zizzi and Ask Italian has announced 75 site closures which will put up to 1,200 jobs at risk. The closures come as part of a takeover by investment firm Tower Brook Capital Partners in a £70m pre-pack administration deal to save the group. Steve Holmes, chief executive of Azzurri, said: “Despite being a successful operator, the immediate loss of revenue during lockdown meant that we have had to make some incredibly difficult decisions to protect the business for the long term.".
LEISURE
Casual dining group Boparan Restaurant Group has announced that it will remove the £10 cap from the 'Eat Out To Help Out' discount scheme launched by the government designed to boost the hospitality sector post-lockdown. Group brands such as Giraffe, Ed’s Easy Diner, Slim Chickens and Carluccio’s will all be taking part in the scheme which will see the entire bill halved across all food and soft drinks - regardless of the total.
Prolific fast food chain McDonalds has now reopened half its venues for eat-in customers. 700 of its 1,300 stores UK-wide are now open for table service only. Customers order food directly via the app, at the till or on the digital boards inside the store.
The Hospitality Professionals Association (HOSPA) has revealed research showing that since reopening, two thirds of hospitality operators saw revenue down by over 50% compared to 2019. An additional 25% said that revenue was down, but by less than 50%, and a handful said revenue was not down. However a third of businesses said that takings on 4th July when the hospitality sector was able to reopen were better than anticipated.
PROPERTY
Shopping centre giant Westfield has announced plans to turn the ex-House of Fraser unit into 68,000 sq ft of flexible working space.
The Manchester Arndale Shopping Centre will welcome two new leisure occupiers across 17,000 sq ft; digital gaming venue Electric Playbox and bowling alley Roxy Lanes. Both new sites will open from 1st August in line with government guidance on leisure venues. A spokesperson for intu said “Extending our leisure offer means we’re providing something people can’t just purchase online. These two venues are great additions to the dynamic mix of shops, restaurants and leisure facilities people can enjoy.”
Rental income fell by over £1.5bn in Q2 as landlords failed to collect rents from struggling retailers forced to close due to the covid-19 pandemic. Research by property consultant Remit Consulting claimed that a fifth of rent due in March still had not been collected 90 days later. A consultant a Remit said “With average collection on the June due date over 11% lower than three months earlier, investments in the UK property could see an even bigger shortfall this quarter.”
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