Like many of you, last Saturday evening I sat and watched our somewhat bewildered PM deliver the news that the business community was dreading – despite repeatedly insisting that he wouldn’t do it, he had made yet another U-turn and decided after all to put England back into lockdown, from 5th November until 2nd December. My initial feeling was one of foreboding – that I was going to come into the office on Monday to be greeted by a tide of less than positive calls and emails from customers. How wrong I was – just another reason why I love the toy trade and its enduringly positive outlook. We really do ‘always look on the bright side of life’, even – especially – in the face of adversity.
Without doubt, lockdown 2 is a bloody nuisance. But Christmas is most definitely NOT cancelled – and neither are bricks and mortar sales. Speaking to a host of toy retailers of all sizes on Monday to gauge their reaction to the news, it was clear that the resilience that has been evident throughout the year is still there in abundance. Instead of sitting there moping and moaning, retailers were already gearing up to continue trading through the next four weeks. They’ve been through lockdown before, they know what it entails and what they need to do – and they wasted no time in making sure their customers knew how they could continue to get their hands on toys over the coming weeks.
As an added bonus, in the days preceding lockdown, toy stores were absolutely flying – this very welcome sales surge saw queues forming and sales numbers matching Christmas week. Gary Grant was almost bouncing off the walls as he told me that online sales had grown by 400% over the weekend, while Monday’s trading across the store estate had hit double the figure achieved on the corresponding day last year by 2PM. As Gary said to me: “Shoppers are definitely panicking. If they didn’t take the ‘shop early for Christmas’ message on board before, they certainly are now.”
It wasn’t just UK retailers who were brimming with positivity this week – I had a fascinating call with FAO Schwarz’s Jan-Erik Kloth, who was delighted to share how the retailer is bringing its renowned experiential retail experience to life in the post-covid digital arena (more on that in the coming days and weeks), while Mattel’s EMEA managing director Sanjay Luthra was just one of many senior toy executives keen to share how the company is supporting its retail customers in the run-up to Christmas. Far from being faced with a barrage of negativity this week, it has been inspiring and uplifting to talk to people who are rolling their metaphorical sleeves up and getting on with it, facing the challenges head on. We survived lockdown before and we will survive it again.
Of course, it’s inevitable that there will also be some less than positive stories, given the prevailing climate. The news that Spring Fair has been cancelled for ’21 will come as a surprise to precisely no-one, although the announcement that John Lewis will be making 1500 head office staff redundant was perhaps more of a shock (although I am going to say what many of you are thinking…if they are letting that many staff go, how many people did they have working there in the first place?).
The other eyebrow-raising retail news of this week was the revelation that the majority of standalone Argos stores will effectively be phased out over the next four years, with 420 earmarked for closure by March 2024. Overall, 3500 jobs will be lost at Sainsbury’s, which is a huge shame, although Argos’ strong performance during lockdown – when sales increased despite stores being closed – suggests that the store estate is no longer a key driver of Argos sales, making the move somewhat inevitable.
Interestingly, research unveiled this week suggests that independent shops have been better at surviving Covid-19 than chain stores: small independent retailers on the High Street suffered a net decline of 1,833 stores in the first half of 2020, less than a third of the 6,001 chain store outlets lost. The research concluded that independent operators were more agile and reactive, bringing in new product lines and responding quicker to trends and consumer demand. They also had a smaller cost base to cover during periods of little or no trade and had been able to take advantage of government support schemes (although to be fair, that couldn’t be said of Sainsbury’s, which this week announced dividends to shareholders while pocketing £230million in business rates relief. The combined value of the final and interim dividend was…. you guessed it, just over £230million. And there you have the intrinsic flaw in the system laid bare in all its glory….).
Anyway, I digress – for me it has been a surprising week. I expected nervousness and trepidation, and while those feelings inevitably persist in certain quarters, most of the people I have spoken to this week are confident in their brands and their plans, and continue to remain optimistic about the UK toy market’s prospects for the festive season. Lockdown does raise the issue of whether we will now see large crowds return to stores in December, which was something retailers were working hard to avoid – and arguably rather undermines the government’s virus containment strategy – but that’s a challenge for another day.
For now, let’s continue to make the most of the ‘new weird’ – as retailers introducing a virtual Father Christmas service are certainly doing. Personally, I think it’s a great move – why shouldn’t kids get zoom fatigue like adults? “Santa, you’re on mute….SANTA!”