A week on the high street

18th November

November 18, 2020

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retail

Supermarket chain Asda posted a like-for-like increase in sales in Q3 as demand for Christmas items spiked early this year. Online sales at asda.com and George.com jumped by 72% year on year, boosted by grocery and back to school products.


Despite previous plans to expand, bakery chain Greggs has announced 820 redundancies across the business as they continue to fight against the pandemic. CEO Roger Whiteside said in a statement: “the battle with Covid hasn’t gone away and is intensifying further”.

 

Sir Philip Green’s Arcadia group is allegedly in talks to secure a £30m loan as lockdown 2.0 put pressure on recovery plans. The group employs 15,000 staff, 14,000 of which have been furloughed due to the current lockdown, which has severely impacted the groups ambitious Christmas trading plans.

 

Shareholders at discounter B&M are to receive a special £250 dividend after lockdown sales almost doubled profits in H1. The value brand was one of the few stores classified as ‘essential’ and able to remain trading. CEO Simon Arora said B&M’s business model had proved “well-attuned to the evolving needs of customers.”

 

Another pandemic ‘winner’ is car and bike accessories business Halfords, who maximised on the huge increase in cycling over the summer period and during the first lockdown. Halfords is another brand classified as ‘essential’ and therefore is able to trade both online and from its store portfolio even when restrictions are at at their highest. CEO Graham Stapleton said: “We are very pleased to have achieved such a strong first-half performance against the backdrop of one of the most challenging trading environments in recent history. It is a great testament to the strength and adaptability of our business, as well as to the professionalism, hard work and dedication of our colleagues.

 

Pret A Manger will launch a hot dinner menu this week in a bid to find ways to tap into new corners of the food market during the pandemic. The food to go chain will sell meals though delivery platforms from Thursday which will include dishes such as healthy curries, rice bowls, mac and cheese and salads. Boss Pano Christou said “Over the last few months I’ve worked my way through many of our competitors’ menus – a year ago I probably had one takeaway once a month, but I wanted to understand what’s out there. One of my conclusions is that there aren’t many out there offering really healthy, fat-free, hearty options in the evenings. We’re not going to try to do a McDonald’s and do burgers and fries; we’re not trying to replicate a Chinese restaurant. But with the strength of our brand, we have a licence to play and give it a go.”

 

Leisure

The Night Time Industries Association (NTIA) has said that the evening economy faces ‘extinction’ as nightclubs remain closed with no roadmap towards opening. It claims that many are considering legal action in a bid to save the clubbing culture in the UK. A spokesperson from NITA said “nightclubs are continually excluded from funding provisions and fears are growing for their future as we have yet to see a roadmap or exit strategy which directly relates to these types of businesses."

 

Italian foodhall firm Eataly has announced plans for its first UK location for early next year. The flagship site will open next to Liverpool Street Station in London and will comprise of 40,000 sq ft including three restaurants, a food market, a cookery school and what will be the biggest Italian winery in the capital.

 

Property

Property investor LCP has acquired shopping parade Bowen Square in Daventry - 110,000 sq ft of retail space which is anchored by Waitrose. Martin Wade, LCP asset manager, said in a statement: “Over the past three years, we have focused on boosting our local shopping centre portfolio because they provide an excellent investment opportunity." Bowen square provides a local destination which houses many retailers classified as essential including Domino’s, Boots, Greggs and Tesco.

Landlord British Land has seen a dramatic decrease in the value of its retail portfolio of -15% in the first half of the year. CVAs, closures and increasing restrictions have also provided challenges in the form of rent collection since March. They posted a 30% decrease in profits for the first half of the year. New CEO Simon Carter said: “Our first-half results naturally reflect the challenges in retail. Against this backdrop, we remain focused on active asset management, working to maximise rent collection and keeping our units occupied with successful retailers.

 

Just over 72% of commercial rents had been collected by 3rd November, according to a report by Remit consulting, which has also forecasted a total shortfall of 20% by the end of the quarter. These figures mirror the trend seen during the first lockdown earlier this year. A spokesperson at Remit said “It is evident that the stricter restrictions and limitations that had been imposed by the government in some parts of the UK earlier in the quarter, and the expectation of a national lockdown had little impact on the ability or willingness of business occupiers to pay their rent,”

 

OPENINGS AND CLOSURES

Habitat will close its flagship store and relaunch in Sainsbury’s and Argos; TGI Fridays has announced it is opening a new cocktail bar and restaurant concept in Surrey called 63rd+1st; BrewDog has announced plans to open its next hotel in Manchester in 2021 under its DogHouse brand; The owners of Latin American and Mediterranean restaurant and bar Zuaya in Kensington are opening a sister Italian restaurant next door.

H1 2020 market analysis

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