We’ve been subjected to more than a year of unprecedented restrictions but now, largely thanks to the vaccination programme, an end is in sight on July 19.
At the time of writing, government ministers seem pretty set on going ahead with the final easing of restrictions (although, as always, caution is being urged), paving the way for a further opening of society – although the drive is still on to get as many people jabbed as possible.
And retail has moved further forward on the long road to recovery. British retailers reported their third month of rising sales in June, according to the latest figures from ONS (Office for National Statistics).
This news will be warmly welcomed by toy retailers, who are still recovering from months of lockdown when they were unable to open their stores.
And as Helen Dickinson, chief executive of the British Retail Consortium (BRC) notes, the reopening of hospitality has provided extra impetus for many consumers to hit the streets, particularly as the summer weather kicks in. She says retailers are reporting an increase in purchasing over browsing, suggesting shopping trips are becoming more purposeful. Consumer confidence appears to be rising fast, thanks to both the widespread vaccination and testing programme and the extensive measures taken by retailers.
But, as Helen points out, challenges remain. Many retailers built up considerable debt – some of it from rent payments – during the periods of lockdown and will be relying on continued consumer demand to trade their way out. Those based in larger cities have also been hardest hit by the drop in footfall, as many city workers continue to work from home.
She adds that the changes caused by the pandemic are being bolstered by a fundamental transformation in consumer behaviour, which started long before Covid. Internet sales continue to rise, albeit at a reduced pace, supported by the massive investment in digital channels, logistics operations, and click-and-collect options, ensuring UK consumers continue to benefit from a world-leading shopping experience whether they are in their homes or on their high streets.
Meanwhile, retailers’ costs are continuing to mount due to Brexit red-tape, Covid-related supply chain disruption, raw commodity shortages and increased shipping and petrol charges. Helen says the cost burden on retailers may be passed onto consumers, threateningprice rises as the pressure mounts in the months ahead, especially with additional Brexit checks
Her views are reflected by the experiences of leading toy executives interviewed in this issue. Kate Gibson, MD of British toys and games business Gibsons, confirms that “costs are rising across the board”. She says that whether it’s the current freight situation and costs associated with container shipping or the price of raw materials, suppliers “will be navigating their way through this challenge for the foreseeable future”, adding “this also extends to retailers, as prices will inevitably have to rise”. Gibsons turns 102 this year and Kate admits that 2021 has probably been the most challenging year of her career and one of Gibsons’ most challenging periods – but has also brought opportunities for the company such as growing its website and understanding of the digital world.
Gary Grant, founder and executive chairman of The Entertainer, says: “The very biggest challenge in the 40-year life of our business is Covid. We’ve just endured a period of huge upheaval and it’s difficult to know where bricks-and-mortar retail will level down to in a normal year. But one thing is for sure: our website won’t drop back to its pre-pandemic level. Therefore it’s important to invest…”
In the words of KPMG Retail Partner Don Williams, retailers now face an interesting few months as they assess how they best entice their customers back to stores and what the right blend of offline and online will be as spending patterns settle in a post-Covid world.
He predicts that with the prospect of the full lifting of Covid restrictions coming into force this month, there will be increased competition for share of wallet as consumers focus on those leisure and hospitality activities that have been denied to them due to lockdown.
It is a summer that starts with cautious optimism for many toy retailers, who will be hoping that the continued success of the vaccine rollout and an improving economy will offer scope to spark a big surge in consumer spending.
So, what’s been your trading experience, as a toy retailer or supplier? I’d love you to get in touch and share your story. You can connect with me via LinkedIn or email me at email@example.com. I look forward to hearing from you!