Wednesday, January 19, 2022

MAGGIE PAGANO: The transition to online shopping is affecting downtowns

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An old proverb: “When work is hard, it’s hard to buy.”

Recent sales updates for the Christmas period by some of the UK’s largest companies show that the pandemic has not dampened the British buyer’s appetite for spending.

But what is evident in the sales results is that buyers ’habits are changing in terms of how and where and to what goods – the distribution of their revenue due to the impact of blockchains and Covid restrictions.

Recent sales updates for the Christmas period by some of the UK’s largest firms show that the pandemic has not dampened the British buyer’s appetite to spend money.

In addition, well-performing companies such as Sainsbury’s, Dunelm, and JD Sports have been able to adapt quickly to these changes.

Honestly, there’s luck, too, because they’re in areas where customers focus their spending, mainly on home and food.

Take Sainsbury’s. It was very well prepared for Christmas, with strong food sales and especially the sale of carbonated champagne, reflecting how customers are stocked up for more banquets at home.

Annual revenues were increased accordingly. At the same time, Sainsbury’s keeps prices low and isn’t afraid to fight directly into the hearts of German opponents Lidl and Aldi.

Grocery knows that keeping prices competitive and giving customers value for money is the best way to increase volume, and will continue to do so this year as living prices rise.

Dunelm is another thing that benefits from a switch. The home appliance team is now updating the utility guidelines while helping customers renovate their homes.

Compared to two years ago, Dunelm reports sales of 26 per cent and forecasts £ 140 million in the first half of the year and ‘tangible’ growth for the whole year.

Young people may not have to spend a lot of money to go out or dress up for parties, but they are still buying expensive, sought-after trainers sold by JD Sports.

The sports network will also set its profit targets after a ‘strong’ performance and easily outperform market expectations at around £ 810 million.

If that’s the case, you won’t often hear such reassuring feelings from company executives, even in ordinary times.

So it’s gratifying to hear that trade has looked good so far, especially since the UK appears to be one of the first countries in the world to emerge from a pandemic.

Still, the last two years have not been painless for many companies. Old brands in the middle are squeezed in with downtown departments like John Lewis, the Fraser Group and Marks and Spencer, although companies like M&S are adapting quickly and are opening smaller grocery stores with a small assortment of additions. turned on.

One of the long-term changes in spending and shopping behavior is that some form of “work from home” stays here, probably a couple of days a week, not five.

That’s why online shopping continues to grow, and that’s why many retailers – M&S, Greggs and even Pret A Manger – are moving from downtown to smaller towns or retail parks to get closer to customers, most of whom are part-time. works. participants.

Hargreaves Lansdownown analyst Susanna Streeter warns that this will be a painful transition not only for older brands, but also for downtown property owners.

Turning office space into residential is costly and is very slow when councils agree to plan. Hopefully, if they want the centers to survive and the tariffs to be paid, they will see the wisdom and act quickly.

This is a necessary condition.

Transient or not

Inflation clouds circulating across the United States do not seem to be transient. Inflation rose to 7 percent for the seventh month in a row, the highest in 40 years.

This jump is caused by rising prices for energy, food, housing and new cars – a surprising third time this year.

Although energy prices fell in December – the first decline since April – food prices are still up 6.5 percent.

Economists say there are signs that prices in some sectors, such as raw materials, are falling as supply chains get rid of the problems caused by the pandemic.

Federal Reserve Chairman Jay Powell needs to find a more appropriate word than the word “transient,” as well as be very careful when it comes to raising interest rates so as not to lead the U.S. to stagnation.

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