With the announcement of a recession in August 2020 following the coronavirus lockdown, everyone sat on the edge of their seats to see how business sectors would respond. Even though UK retail sales are on the rise following the start of lockdown in March, the questions surrounding physical stores have continued to circle.
However, while some businesses like Pret A Manger have cut jobs, companies like Screwfix are expanding more than ever before. In this post, we’re going examine why some businesses are thriving while others are struggling to stay afloat.
Pret A Manger to cut 2,800 jobs
In August, the fast-food chain Pret A Manger announced they would be cutting 2,800 jobs as it closes 30 stores across the country. With their sales reaching lower than 60% of the previous year since they reopened in July 2020, the economic impact of the lockdown period is evident.
This recent outcome for the grab-and-go food outlet could be the result of numerous factors. Like many businesses, government regulations forced them to close for a prolonged period to help prevent the spread of COVID-19. However, after the lifestyle changes instigated by lockdown, the economic decline has continued. Fewer workers are commuting due to remote working, reducing their potential market further than ever before.
Screwfix to create over 400 new jobs
In comparison, Screwfix has recently announced that they plan to open 40 new stores across the UK and Ireland, creating at least 400 new jobs for retail workers. They currently have over 600 stores open at present, and they hope to continue their growth trajectory despite the pandemic.
Unlike food chains such as Pret A Manger, Screwfix was able to stay open throughout lockdown as an essential service which offers the company an advantage in comparison. Moreover, their target audience of construction workers continued to work in lockdown, allowing Screwfix to cater to their demand.
What does this mean for retailers?
As a reflection on the current retail market, the mixture of job cuts and new store openings suggests a need for adaptability in the future. Since lockdown, we have witnessed an increase in online spending compared to footfall in shops, introductions of automation into food delivery services, and much more. A further example includes the rise of the facial masks market, increasing by 38% in China alone within the last 12 months. As these examples conclude, the retail industry needs to become more flexible, responding to customer needs as they arise.