RETAIL READY FOR ITS BIG REOPENING
Tomorrow morning will see queues outside the country’s reopened DIY and garden stores – but what does the future hold? Fearghal O’Connor and Sean Pollock report
Behind the scenes with Woodies and others as restrictions ease,
AFTER weeks of lockdown, the country’s garden and DIY stores will reopen to a whole new world of social distancing tomorrow morning. Long queues are likely. For many people, a trip to buy paint or compost may be their first non-grocery shopping trip in quite some time. And with Ireland’s newly quiet life without pubs, holidays and sport for distraction, it’s likely they will come armed with a long list of supplies they are seeking for home improvement projects.
Woodie’s CEO Declan Ronayne says the chain is expecting an onslaught of customers. The Grafton Group-owned chain is one of the highest-profile retailers preparing to open its doors tomorrow, and Ronayne says that after weeks of preparation he and his staff are looking forward to it with anticipation – and perhaps some trepidation.
He has given his staff a key message: “We’re no longer just in the DIY, home and garden business. We’re in the mental health business.”
New statistics from Bank of Ireland show just how important home improvement and gardening has been for Irish people seeking an antidote to the recent loss of personal freedom. Online spending in hardware stores is up 247pc since the stricter restrictions came into effect on March 28, while online spending in garden centres has risen a massive 541pc during the same period. And that does not include the period covering the panic-buying phase of the first two weeks of lockdown.
Now, with supplies of paint and potting compost running low in garden sheds around the country, huge pent-up demand is expected to be unleashed over the coming 24 hours.
Ronayne fully expects a situation that will require careful management and he and his team have spent weeks planning for tomorrow. “I expect substantial queues,” he says.
Woodie’s has already spent €400,000 on Covid-19 safety measures: “We’re in the fortunate position that we think there’s demand for our product but, whether there is demand for our product or not, when we reopen, every one of our staff is going to have a face shield, for example.”
Apart from new sanitation and isolation stations in every store, the company has spent €35,000 on T-shirts for staff with a special social-distancing message, a further €12,000 on hand cream for staff to stop hands chaffing because of constant washing and €10,000 on thermometers.
But, while the health of staff and customers is the number one priority, it is the spending patterns after that initial surge that will determine the health of the sector itself and the prospects for the thousands of employees who have had an anxious wait ahead of tomorrow’s reopening.
“Listen, being locked down for seven weeks is a bit of a disaster. The crucial months for us are April, May, June and December,” says Ronayne. “Clearly we’re going to be busy between now and the end of May. The question is what happens in June and July? We simply don’t know. We’ll play the cards that we’re dealt. The key to our prosperity at this stage now is the return visit. We want to give people the confidence to say ‘Those guys have it nailed and I’m going back there because they make me feel safe’.”
Fergal Doyle, co-owner of Arboretum, a garden centre business with premises in Co Carlow and Co Wicklow, is also eager to open his doors again. He experienced some of his most challenging days in business at the outset of Covid-19, he says.
“It’s probably a cliche, but it was surreal, it was like being in a movie,” says Doyle. “The instant thing was letting people go in the cafe on March 16. That was 90 people let go straight away.
“Laying them off was the hardest thing Barry [brother and co-owner of Arboretum] and I ever encountered. Our mother, Rachel, who founded the business, said it was the hardest thing she has ever done in 42 years of business. She lived in a time where the garden centre was flooded, and interest rates were 19.5pc.”
The lockdown came as a shock for Doyle, and many other Irish garden centre retailers, mainly as he was gearing up for the busy spring season.
“In the first week of lockdown, we took in two containers of furniture that came into Dublin port. We couldn’t say we didn’t want them now. It was a sick feeling taking that off the truck.”
Fortunately, Arboretum started to gain some traction online and he was able to bring in 30 staff to help pack and deliver orders. The momentum grew, with Arboretum seeing a 400pc increase in online sales over the Covid-19 period.
Despite the online sales, Doyle is still ruing the fact the shops haven’t been able to open to green-fingered punters during what has been a glorious spring. Sales at Arboretum are down 50pc over the spring period.
With the company set to reopen its Co Carlow store tomorrow and its Co Wicklow store on Thursday, he is now trying to shift the message from sales online to reassuring customers they will be safe visiting his garden centres.
The company, like Woodie’s and others, has followed the guidelines from the HSE and Retail Excellence. The stores will now be fitted with plastic sheets at tills, aisles will be spaced to allow for social distancing and hand sanitisers will be available to customers. Stores will also be monitoring how many people are allowed into the premises at any given time.”
Of course, during the weeks when the doors stayed firmly shut, online has presented a threat and an opportunity to the sector.
Initially, Woodie’s decided not to do online because it was a small part of the operation that operated out of the back of just one store where it was felt social distancing might be tricky for staff. But over the next few days the company figured out a system and decided to relaunch its website.
“We opened it at midday on a Tuesday and that day we did three Black Fridays in terms of online sales. The following day we did five Black Fridays and the day after that we did another five Black Fridays. Out of nowhere, we had got 10,000 orders and we realised that we had created a real problem for ourselves,” says Ronayne.
But within a week, with the co-operation of voluntarily redeployed staff, who otherwise would have been at home availing of the government wage-subsidy scheme, Woodie’s expanded its online offering by creating six hubs around the country.
“We had to crank up the supply chain and get this entire engine operating again. All the time the clock was ticking because customers were expecting orders to arrive. We delivered 99.5pc of the orders as promised. It was remarkable.”
Nevertheless, the shadow of Amazon looms large across the horizon for all retailers these days and will cast its chill for less agile players long after this pandemic is a memory. But Ronayne is confident Woodie’s has the ability to win any direct challenge from online competitors.
“The crucial question is what happens after the pandemic? Will the level of online business go back to what it was? Our business has always been primarily an in-store business. You know, if you go outside to the garden and you want to do something with your hose and the connector
is broken, well you’re not clicking on to Amazon. You’re going down to Woodie’s because you want to get another one and you want it now.”
The last decade, bookended at either end by economic collapse and a pandemic, has, of course, been a rollercoaster for Woodie’s and others in a sector very much driven by consumer confidence. When Ronayne joined the business in 2013 from consumer tech retailer Dixons — where he had witnessed a massive business transformation — Woodie’s was operating at break-even with operating margin at 0pc. He and his team drove a change in the culture as well as in the product mix and the look and feel of the stores moved from an old-style builders merchants’ to a retail destination with broader appeal.
“Men buy white or magnolia paint and women buy colour paint. We’re in the colour business. We’ve a strong gardening business that is to a large degree more about women than men. When we sell a drill it’s normally not to a builder, it’s normally to somebody who is drilling five holes a year and probably to hang a picture.”
The changes worked. By 2019 its operating margin was up to 9.7pc. That has pushed profits from zero to above €20m on turnover of about €230m. But even with this cushion, Ronayne, like everyone else in the sector, is still very concerned about what the months ahead will bring.
“We know demand will be very, very heavy when we reopen. But the question is, will that be just a large lump of stuff that people have on a list that they will buy in bulk when we open or is there going to be an ongoing flow of business from the fact people won’t be in pubs and are not going to go on holidays. They were going to spend €3,000 or €4,000 on a holiday. Are people going to spend that on a new kitchen instead?”
A key concern is the lucrative Christmas selling season. Woodie’s, like others in the sector, sell a lot of Christmas-related product.
“That market for decorations and other Christmas product is very compressed into the last couple of weeks of December. We tend to discount the product as we move through the Christmas season and generate an awful lot of foot-flow. We’re maybe not going to be able to do that this December. But that December product has all been bought already and will start to ship in about seven or eight weeks from China.”
Ronayne believes the only prudent thing for any retail business to do right now is to operate under the assumption that, by the end of the year, retailers will still be operating in the shadow of a pandemic and everything that comes with it.
Arboretum, too, is taking a cautious approach to the months ahead. It plans to bring 30pc of its staff back to work tomorrow but, if at a later date it is also able to reopen its food offering — initially at least for takeaway— then this number may rise to 60pc.
Doyle is expecting the stores to be busy when they open but is relying on that most unreliable of factors to sustain any busy period — the Irish weather. “If the weather remains good, and the summer demand holds, people are just itching to go somewhere else for something to do.”
With Doyle confident Covid-19 will pass, he feels the country will eventually get back to the way it was. He doesn’t want to think about a second wave and is confident the Government’s plan to tackle this will work out.
“We are gung-ho, ready to go,” he said. “It is a scary but exciting time to try and figure out how to serve people digitally as we have been doing well over the last six weeks. Now it’s time to continue that work and service the physical customer as well. That’s going to be a challenge.”
There is, of course, trepidation in the air for the staff and management teams on the frontline of the first wave of Ireland’s return to one of its favourite hobbies, shopping. But at Woodie’s, like Arboretum, the attitude is upbeat. “The positives out of this are that when people are really challenged, their ability to adapt, to think differently, to do things differently and to do things fast, has been quite extraordinary,” says Ronayne.
He imagines his management team coming to him in years to come with some previously unimagined business problem.
“I’m going to sit down and say ‘guys, we set up six hubs in a week. Don’t tell me this — whatever it might be — can’t be done’.”