Smyths Toys cancels traditional Christmas promotional event in UK & Ireland

Smyths’ £10 off every £50 spent event has previously taken place at the end of September.

Smyths

According to media reports, Smyths Toys has cancelled its long-standing Christmas promotion of €/£10 off for every €/£50 you spend. According to the Irish Mirror, the retailer made the decision due to the Covid-19 pandemic, saying that it cannot risk having large volumes of shoppers flock to stores in a short period of time with social distancing in place. The decision will apply to the retailer’s stores in both Ireland and the UK.

A Smyths spokesperson said: “Unfortunately, our 10 off every 50 promotion will not run for 2020. We cannot responsibly encourage a large volume of customers to visit our stores in a short time period while adhering to social distancing guidelines.

However, we are excited to announce we will have more promotions and super savings on your favourite toy brands throughout the autumn-winter period.”

While it is undeniably true that bricks and mortar retailers will have to adopt different strategies when it comes to crowd management in stores in the run-up to Christmas this year, suppliers have been speculating for months about what may happen with retail discounting during this year’s festive season. Potential logistics challenges, together with the possibility of product shortages on some hot items, has led some to wonder whether aggressive discounting might be a less widespread tactic this year.

In addition, despite the fact that many toy retailers have enjoyed far better trading than many other retail markets, the whole retail sector is facing increased costs and ongoing uncertainty; under the circumstances, each retailer’s individual market share is arguably less important than maintaining a viable, profitable operation. So, while there will inevitably still be a raft of retail promotional activity to entice consumers, perhaps this year’s offers will be less cut-throat than we have seen in recent years?

Exclusive: Reboot 2020 – a fresh start for the toy trade

Toy World considers what the short-term future of toy retail might look like, and the biggest opportunities for Q3 and 4, in the July Reboot 2020 feature.

Reboot 2020 child looking in toy shopAll non-essential retailers across the UK are now allowed to reopen their doors, even if a fair few have chosen not to do so, but now comes the next big challenge – how to entice shoppers back to stores.

There is plenty to be hopeful about as we enter the second half of the year and count down to the all-important festive selling season. While many non-essential categories have struggled to match traditional sales during lockdown, the UK toy market has proved remarkably resilient. According to NPD, the value of UK toy sales rose by 17% in the two months from the beginning of lockdown compared with the same period last year, while Games & Puzzles saw a +43% uptick in sales between 1st January and 23rd May, compared with the same period in 2019. Outdoor Toy sales, meanwhile, rose +31% in the same period, and Building Sets jumped +17%. Meanwhile, as outlined in Rory Partis’ article on pages 26-27 of the July issue of Toy World (which you can read here), the UK toy market is currently +7% in value YTD versus the same period in 2019.

However, it’s undeniable that the pandemic and resulting lockdown have changed the face of retail, at least in the short term, maybe forever. With stores temporarily shuttered for so long, consumers were forced to look online for the products they needed and wanted, resulting in a huge shift to online shopping. Research by Retail Economics and Squire Patton Boggs shows that 45% of consumers bought items online that they would normally have bought in store for the first time during the pandemic, and this behaviour is expected to stick, even as the lockdown eases. This doesn’t mean brick & mortar is dead, but it would appear that the future of retail will rely far more heavily than before on an omni-channel approach designed to reach consumers wherever this may be. Many toy retailers are already successfully embracing this strategy.

In-store, Covid-19 has changed the way we shop. Last year, there was much talk about experiential retail saving the high street, the need for shops to offer something unforgettable and unique alongside the baseline ‘get the thing you want and then leave’ approach. Best laid plans and all that; now we’re being encouraged not to touch things if we can help it. This needn’t mean shopping must become a chore though.

In this article, Toy World shines a light on how suppliers can support their retail partners and how retailers can make best use of an omni-channel strategy. We also analyse how the pandemic has changed the marketing game, the impact of Covid-19 on where consumers want to shop, and how differences in expendable income may affect spending habits in the run-up to Christmas.

To read the full, in-depth Reboot 2020 piece, which was published in the July issue, click here.

Online sales continue to thrive after reopening of the high street

ParcelHero predicts the end of seasonal peaks for home delivery.

ParcelHero seasonal peaks

Despite the reopening of the majority of high street stores in June, the UK courier service ParcelHero has said demand for home deliveries has now become evergreen, with seasonal peaks and troughs looking to be a thing of the past.

ParcelHero’s head of consumer research, David Jinks MILT, explains: “Contrary to many analysts’ expectations, parcel deliveries and e-commerce sales have continued to climb in July even though most non-essential stores reopened on 15th June. ParcelHero has seen no sign of any decline in deliveries so far this month and is still experiencing Christmas + level volumes.”

He adds, “Online sales are booming. Growth Intelligence says over 85,000 businesses launched online during lockdown and its loosening has done little to halt demand. In fact, there is strong evidence that the reopening of many high street stores actually boosted online sales. According to the online retailers’ association IMRG/Capgemini, multichannel retailers ‘recorded the highest online growth ever’ during the week when physical retailers reopened their doors.”

This result, according to David, is not surprising given the consistent demand for online services. Indeed, A&M/Retail Economics estimates that 17.2m British consumers have made changes to the way they shop. David adds those who see the risk of Covid-19 to be very high are “almost four times more likely to have shifted their shopping habits for the long-term.”

David concludes, “At the beginning of lockdown, the front door became the front line in the fight against Covid-19. Britain’s new online shopping habit is one that most consumers, especially older shoppers who have ventured online for the first time, may be reluctant to kick any time soon.”

For ParcelHero’s latest information on every available quality courier service currently available, for both everyday senders and retailers, see its live parcel price comparison quotes here.

Let’s play Twister, let’s play Risk…. it’s the Friday Blog!

Games are back in the news this week, and not just because they’re still selling incredibly well. No, this time it’s because the government has turned to heritage gaming for inspiration on how to defeat coronavirus. Rather than complex strategising and scenario planning long into the night, it appears that our illustrious unelected leader, super spore caster Dom, and his mate Boris Johnson have been holding their own Hasbro Games Night at Number 10 instead. That would certainly explain the photo on the front of last week’s Sunday Mail – Johnson wasn’t doing press-ups, he was playing Twister (beer belly: red, green, yellow and blue). Their game-playing shenanigans have also given rise to the UK’s new virus response strategy – now officially referred to in Parliament by its no-longer secret code name, Whack-a-Mole. If Hasbro isn’t working on a special limited edition ‘2020 coronavirus edition’ of the original game as we speak, I would be truly amazed. Rumour has it the pair also played obscure board game ‘Escape from New York’, but adapted it for the modern era by renaming it ‘Escape from Leicester.’ Maybe other government policies will be based on D&B’s Games Night in future – instead of pay rises, maybe all NHS staff could be given a game of Operation instead? And let’s just hope that no one gives them a copy of Risk or who knows where we’ll end up?

Back in the real world, the virus continue to play havoc with our old routines – both Autumn Fair and Comic Con have officially been cancelled this week, as organisers grapple with the realities of putting on trade and consumer shows in the current climate. I’m sure it is technically feasible with an awful lot of planning and a raft of safety measures, but as one sanguine show organiser said to me recently: “Just because you can do something, doesn’t mean you should.” Indeed.

Some may even feel that sentiment could apply to the re-opening of pubs, bars, restaurants and other businesses this weekend, especially after recent developments in the USA. But looking at the move more optimistically, it will hopefully bring even more people back out into towns and cities, giving an additional boost to retailers. From what I am hearing, re-opening has generally gone pretty well – value sales shot up in the first week, and while that trend hasn’t been sustained in week two, some indies have told me that they’ve seen footfall pick up a bit this week, so maybe consumers have been favouring local High Streets over bigger destinations? In the first week, I understand that all supercategories were in growth for the first time since lockdown, even collectibles – anecdotally, it seems that kids are keen to spend the pocket money they’ve been saving up for the past 100 days.

However, despite the fact that the toy market continues to perform solidly, it is also inescapable that the wider retail channel and other parts of the UK economy are in for a pretty rough ride. The past couple of weeks has seen host of redundancies and store closures being announced: last week, we reported that Very Group would be losing over 100 people from its head office team, while this week saw John Lewis chairman Sharon Lewis warn of the impending closure of an unspecified number of stores, together with one London office. Details of which stores are for the chop will be revealed in July, at which point we’ll get an idea of how many job losses will follow. We already know the answer to that question at Harrods, where 700 roles – 1 in 7 of the workforce – will be disappearing. Overall, over 12,000 jobs in the retail and aviation industries were lost in just two days this week – incredibly sad and if this trend continues after the furlough scheme ends, it will surely curtail the speed and strength of economic recovery.

Thankfully, not all UK retailers are in the doldrums – far from it in fact. B&M saw its revenue rise by over 33% in its first quarter, while sales at Argos rose by over 10% over the same period, aided by a 78% rise in home deliveries, with toys cited as one of the key category drivers. Given how well toy sales have fared in general, we can but hope that this will restrict the number of job losses in our own market. However, there is a hard truth here: the government’s furlough scheme was incredibly generous and has undoubtedly saved many companies from going under in the short term. But it didn’t differentiate between businesses which have a long-term future and those which, frankly, don’t. I understand why means testing the furlough scheme would have been physically impossible given the time frame, but it did mean that millions of pounds were spent propping up zombie businesses, merely delaying the inevitable (we can see that in our own little corner of the media world…). Ultimately, the fallout from the pandemic is likely to result in the mother of all zombie business clear-outs – but I genuinely believe that we don’t actually have that many of those left in the toy market anymore, so we may yet escape relatively unscathed compared to many other sectors. Let us hope that proves to be the case.

One person whose current role has come to an end is Groupon trading director David Ripley, who left the business earlier this week. David will be in the market for a new challenge from 1st October and has told me that he would love for that to be in toys. However, in the meantime, he is keen to use his garden leave productively to support toy-related charities or not for profit toy organisations over the next three months, giving something back to the industry he has been a part of for so long. He can be reached at DavidJMRipley@Gmail.com or on 07738 999210 if you have a project or idea you’d like him to consider.

Before I go, if you’re looking for some uplifting reading for the weekend, may I recommend the special July ‘ 2020 reboot’ issue of Toy World? The physical copy is now arriving through letterboxes, but you can read the digital edition here. On so many levels, this strange and unpredictable year starts now, and this edition fires the starting gun on the all-important second half of the year, celebrating the fresh start that awaits the toy community. Enjoy!

For now, we’re all starting to get our heads around what post-lockdown life looks like in the short term. One picture which has been doing the rounds on social media this week caught my eye: is this what next year’s Toy Fairs might look like? If so, I for one can’t wait…

Friday blog bears

B&M exceeds first quarter expectations

The discount retailer has posted over £1b in group revenue.

B&M exceeds first quarter expectations

B&M Bargains has reported a strong first quarter, with its UK business trading ahead of expectations, as the retailer recovers from the effects of the current climate.

In the period from 29th March to 27th June, the discount retailer saw group revenue rise by 27.7% to £1.15b. Revenue at the UK business was 33.7% higher, with a like-for-like growth of 26.9%, up from 3.9% in the corresponding period a year ago. Revenue at its French business, Babou, fell to £54m from £72.6m.

B&M said it had seen a “steady recovery” in the like-for-like customer count over the quarter, after an initial decline during the Covid-19 lockdown, alongside “significantly increased” average transaction value compared to the year prior.

The company said its UK business has 656 stores trading, versus 632 trading at the end of the first quarter of last year, with no new stores opened in the quarter due to the impact of the pandemic.

B&M chief executive, Simon Arora, commented: “The group has made a strong start to the financial year, with a particularly strong performance in our UK businesses, and progress now resumed in France after an eight-week closure period. However, as outlined at our preliminary results for the last financial year announced on 11th June 2020, there are a great deal of uncertainties ahead.”

 

Shopping centres hopeful for retail revival

Sales and footfall have reportedly increased, though ongoing rent demands are causing further difficulties for retail. 

shopping centres revival

Two of Britain’s largest shopping centre owners are hopeful for a retail revival, with reports of some encouraging improvements as the nation returns to the high street following lockdown restrictions. However, the struggles surrounding retail are still immediate, with both owners revealing ongoing difficulties for shops to meet rent demands.

British Land, which owns shopping centres such as Meadowhall in Sheffield, and office buildings in London, said it had collected 36% of rent from retailers in the June quarter.

Hammerson, the group behind Birmingham’s Bullring and Brent Cross in north London, said it had collected just 16% of third quarter rent in the UK.

However, both appeared positive that there will be a bounceback for retailers impacted by the coronavirus lockdown, with British Land confirming that 64% of stores across its sites in England are now open and have seen sales increase by 91% over the first week of reopening, as well as improved footfall rates.

In a statement, the company commented: “We expect the best-located open-air retail parks to perform an important role in retailers’ reopening strategies, and this was reflected in positive like-for-like sales for out-of-town stores open in England versus the same week last year.”

The group is currently negotiating rents with shops on a case-by-case basis, agreeing rental waivers of £3m in relation to the June quarter, in addition to £2m for the March quarter. “This is an ongoing process and so we expect the collection rates for June to improve over the coming weeks,” British Land added.

Hammerson has said it is “confident that collection rates will continue to improve in all regions as agreements are progressed with brands.” It also added that it had been able to secure some breathing space from lenders and had accessed the government’s coronavirus support scheme to bolster its balance sheet. The firm said 73% of UK rent had been collected for the first half of the year.

These new updates come less than a week after Trafford Centre owner Intu went into administration. Intu, which also owns Lakeside in Essex, had struggled under a £4.5b debt for the past year, and has experienced significantly lower rent payments from retail tenants since the coronavirus outbreak. Toy World recently reported on what’s next for Intu, which can be viewed here.

19 Debenhams stores set to close this month

Closures will result in approximately 600 job losses.

As reported by ThisIsMoney.co.uk, Debenhams faces a make-or-break year as it begins a massive programme of store closures.

Three stores closed last year, 19 shops will shut their doors between 11th-25th January, and a further 28 will follow next year. The list of 19 includes stores in Eastbourne, Guildford, Wolverhampton and Canterbury.

Independent retail analyst Richard Hyman predicted this year would be crucial for many of Britain's high street retailers, saying: "Debenhams and House of Fraser will not end this year in the shape they are in today; at best they will be much smaller and at worst they won't exist at all."

He made the suggestion that Debenhams owners - a conglomeration of banks and hedge funds - have delayed its bleak reality, saying that in a way the chain has 'become a zombie'. Last year it announced that it would close its 50-worst performing stores using a company voluntary agreement (CVA).

Three stores, York, Haverfordwest and Orpington, closed last year. The remaining 28 will be chosen based on the outcome of crunch talks with landlords. Under the CVA, rents will also be cut across many of its remaining 163 stores.

Next week retailers will update the market on the crucial Christmas trading period although the Debenhams rescue deal means it is no longer required to hand out financial information.

Debenhams' chief executive, Stefaan Vansteenkiste, said the chain was working to implement a 'transformation' despite a 'challenging retail environment'.

Store locations and dates of closure

January 11th:

Altrincham, Greater Manchester; Kirkcaldy, Fife; Wandsworth, London; Birmingham,The Fort; Walton-on-Thames, Surrey; Wolverhampton.

January 15th: 

Chatham, Kent; Slough, Berkshire; Welwyn, Herfordshire; Great Yarmouth, Norfolk; Witney, Oxfordshire; Stockton-on-Tees, Co Durham.

January 19th:

Ashford, Kent; Canterbury, Kent; Folkestone, Kent; Southsea, Portsmouth; Eastbourne, East Sussex; Southport, Merseyside; Wimbledon, London.