#Retail2019 That went well …
After a challenging 2019, Norman Broadbent’s Consumer, Leisure & Retail Practice has paused to look back at 2019, and then ahead to 2020. It seems that with every passing year, the Consumer & Retail landscape becomes more turbulent and more volatile. Indeed, recently released research attests to this, with Retail CEOs seeing their highest turnover for 7 years and high-profile administrations including Mothercare, Debenhams and Bonmarche in 2019. CEOs and business leaders frequently attest to experiencing “a very tough environment”, with some even describing it as the toughest climate they’ve encountered. On analysing Christmas trading however, there are some bright spots. As expected these include pureplay retailers such as ASOS and Boohoo, but also older multichannel businesses such as Dunelm, Greggs and Lidl, who saw increased like-for-like sales growth of 5 – 11% during recent Christmas trading, and strong results more generally through the year.
So we asked ourselves “What do these very different businesses have in common that might play a part in their trading success?”
The answers were:
“All three have tapped into the zeitgeist”
- In recent years, Dunelm has significantly broadened both its channel to market and its product range, ensuring its appeal to a much wider audience and millennials in particular
- Greggs have seen phenomenal success with their new vegan ranges, supported by excellent tongue-in-cheek social media presence
- Lidl, with their unerring focus on simple core ranges which deliver “the best quality for the lowest prices” have struck a real chord with the UK consumer
“They have kept things simple, and remain focussed on their core”
- After a number of acquisitions including Kiddicare and Worldstores, Dunelm simplified their proposition and operations in recent years, ensuring a streamlined business with a clear direction
- Greggs have remained true to their bakery heritage and customer base, all whilst expanding their range to reflect changing consumer habits and needs
- Lidl are renowned for their centralised supply chain, consistent process and format across the UK
Although it may seem at first glance as though it is primarily the more competitively priced businesses who are seeing strong results, in fact, there were also good examples of premium retailers doing well over the same period. Notably these were Reiss and Fortnum & Mason (+18% and +13% like-for-like sales growth over the Christmas period respectively).
So, what do we expect in 2020? Sadly, it seems unlikely we will see a more stable landscape. Despite a decisive UK General Election result, and an end to Brexit uncertainty which impacted consumer confidence, the Consumer & Retail sectors continue to face significant pressures including rising costs, increased competition particularly online, challenges in accessing, engaging and retaining the right talent, and the impact of other global events such as Coronavirus and its effect on confidence and supply chain. Consequently, first class leadership teams who work seamlessly together, are agile and quick in their decision-making, will be more important than ever.
If you would like to confidentially discuss how Norman Broadbent Group could help you overcome your business or people challenges, please contact, Lucie Shaw, on 07540 915 077 or via email@example.com