The biggest news events in UK retail in 2019
Which headlines captivated the UK retail sector in 2019? We look back at some of the biggest and most remarkable news stories of the year:
Competition & Markets Authority (CMA) blocking the Sainsbury’s/Asda deal
The regulator blocked the Sainsbury’s and Asda deal in April which suggests a tougher stance on big business. The industry now wonders what might be blocked in the future? Another big question is: where does this leave Asda? Industry watchers say it could be sold off by Wal-Mart in 2020. All eyes will also be on Sainsbury’s board and future strategy in the coming year.
John Lewis announcing first ever half year loss
We’ve seen ample evidence in recent years of the dramatic demise of the department store with major problems at Debenhams and House of Fraser. In a worrying development, John Lewis announced its first ever half year loss in September. Sir Charlie Mayfield, chair of John Lewis blamed margin pressure and cost headwinds: “It’s disappointing but not entirely surprising … this year conditions have worsened.” This begs the question, do dept stores have a future? Certainly, serious reinvention is needed, as evidenced in John Lewis & Partners’ new concept Southampton store.
Nike breaking up with Amazon
Nike announced in November that it will stop selling its trainers and apparel directly on Amazon’s website, ending a pilot program that began in 2017. Does this suggest Amazon’s reign is slipping? The move by Nike signals advancement of the Direct to Consumer model. Nike wants to develop a more direct, personal experience it says. We could well see more brands deciding they don’t need Amazon in 2020.
The department store chain went into administration in April, under the weight of £720m of debt. It launched its CVA later that same month. This January Debenhams has revealed the locations of the 19 stores which are due to shut in the UK this month – resulting in 660 job losses.
Ocado and Marks & Spencer deal
It’s been an eventful year for retail tech pacesetter Ocado. 2019 saw big announcements of tie ups with Marks & Spencer, Coles in Australia and Aeon in Japan. This demonstrates how retail leaders are embracing new tech, driving automation and exploring partnership models. The implication is: companies can’t beat the competition on their own, or without the very latest technology built into their business strategy.
140,000 retail jobs gone in a year
UK high streets have shed more than 140,000 jobs in 2019 as store closures and retail failures made it one of the most challenging years in a generation. This is according to a detailed analysis by the Centre for Retail Research (CRR). The BRC said weak consumer demand, rising costs and the switch to online shopping, exacerbated by Brexit uncertainty, had put businesses under increasing pressure. Jobs went at Bonmarché, Mothercare, Karen Millen, Coast, New Look, Marks & Spencer and House of Fraser due to administrations and store estate downsizing strategies.
Ray Kelvin departure from troubled Ted Baker
The founder and chief executive of Ted Baker, Ray Kelvin, resigned in March following allegations of misconduct, including “forced hugging”. Ted Baker shares hit a ten-year low in December after bosses admitted that the value of its stock had been overstated by between £20m and £25m. They have called in lawyers independent accountants to find out how the mistake was made.
M&S ejected from the FTSE 100
In September Marks & Spencer suffered the humiliation of being ejected from the FTSE 100 index for the first time. M&S had been one of only 28 companies still in the Footsie who were members when it was launched in 1984
Sustainable stores and packaging free initiatives
There was much excitement around Ikea’s first sustainable store which opened in Greenwich in February. It aims to achieve 100% renewable energy and the interior is designed for natural light, reducing a dependence on electricity for lighting. Countless green initiates were announced by retailers in 2019 from Waitrose’s Unpacked packaging free initiative in its Oxford Store in June, to Iceland becoming the first plastic bag free supermarket chain, announced in July.
Bad news on Bags for Life
This was the year of high-profile Extinction Rebellion demonstrations and a spotlight firmly focused on wasteful and damaging consumer and business behaviour. Plastic shopping bags have been fully demonized, with ‘Bags for Life’ seemingly now a failed initiative. Sales of Bags for Life rose to 1.5bn in 2018 as the amount of plastic used by supermarkets increased to 900,000 tonnes, Greenpeace research revealed in November 2019. Campaigners are now calling for a complete ban on the bags or at least higher charges after the research showed households bought an average of 54 a year. Environmental campaigners are likely to ramp up pressure on retail groups to find workable alternatives to plastic packaging in 2020.