Primark paves the way
There is a glimmer of hope for the high street as retailers emerge from lockdown
At last some life in the high street, and from one of the big losers of the pandemic too. Lockdown has been bad for every retailer but it has been wretched for Primark without internet sales to fall back on. While just about every other major chain on the planet sells online, and in increasing numbers too, Primark has steadfastly refused to join the digital revolution.
When you sell £2 T-shirts, it’s hard to make money on deliveries, especially when a third are being returned.
Primark had managed to thrive with its old-fashioned pile ’em high, sell ’em cheap store model until Covid-19 tore through the economy. The chain has 376 stores in 12 countries and when the last closed on March 22, turnover went to zero overnight.
The cost has been £650m of lost sales a month, £600m of earnings, and a cash outflow of £800m after it was pressured into continuing to pay overseas suppliers during the crisis.
Yet the recovery is equally striking, even if it is only early days. Sales plummeted 75pc during the quarter between March 1 to June 20 but since the chain’s stores started reopening on May 4, cumulative sales in the seven weeks that followed were £322m, equivalent to just a 12pc shortfall on last year.
In the final week when more than 90pc of its stores in England and Ireland were trading, sales were £133m, ahead of the same week last year.
True, it is only seven days out of a nearly four-month period and not every retailer is like Primark. The queues for its newly reopened shops have snaked round the street.
In some towns people have waited through the night. Brits still love a bargain.
But when there is a corona jobs cull sweeping through Britain, much of it affecting the high street, signs of life are in desperately short supply. In the last two days alone, retail luminaries John Lewis and Harrods have joined Upper Crust owner SSP, Sir Philip Green’s Topshop, TM Lewin, and Harveys, in announcing major redundancies.
A FTSE chairman told me this week that every big company, including his own, will be laying off large numbers in the coming months, for the simple reason that they will be unprofitable without big job cuts. Don’t hold your breath for a V-shaped recovery.
Amid such gloom, even the improving fortunes of a cheap fashion chain provide hope.
Pollution relief will be temporary
For a company that flies hulking great aluminium tubes across the skies, Wizz Air is fond of talking up its green credentials. In fact, it claims to be the most environmentally friendly of all its competitors.
The airline says its CO2 emissions worked out at 57.9 grams per passenger for every kilometre in the 12 months to June, the lowest of the pack. However, in June, the carbon footprint per flier jumped 64.3pc because it has been flying half empty planes. Is this a more realistic vision of the future, rather than the one being pedalled? It’s comforting to think that the virus has prompted a collective burst of soul-searching that will make us all less selfish.
Even the Prime Minister has been sucked in with his loose promise to “build back better, greener and faster” but we live in a consumerist society where most people would prefer it if their lives weren’t disrupted in the name of the planet. There’s no doubt that lockdown has been good for the environment but only because human activity fell.
Air traffic had halved by mid-March and in the same month UK road traffic fell by more than two thirds. The skies cleared, the air we breathed was purer, and nature returned with a vengeance.
But fewer tube and train journeys mean more trips by car. If the Government’s ridiculous quarantine measures are abandoned, there will be a mad rush to book foreign holidays. A reluctance to visit the supermarket has triggered a surge in online shopping. That means more fumes from delivery vans and increasing quantities of plastic and cardboard packaging. Even private jet use has spiked.
Recessions are often followed by falling greenhouse emissions as consumption falls, but pollution levels quickly return once economic activity rebounds. I suspect this time won’t be any different.
Making capital out of capitals
The weird and wonderful world of day trading has exploded during the pandemic, fuelled by dumbed down mobile apps such as Robinhood.
These amateur investors scoff at the pinstripes of Wall Street and are convinced anyone can make money with a bit of luck. Blogger Dave Portnoy chooses his investments according to the letters he picks out of a Scrabble bag at random. Warren Buffett, eat your heart out.