Retail in 2018 has been a turbulent ride. With companies going into administration, the new dawn of robots, huge mergers and more. Listen to this episode of the podcast to recall the biggest stories from 2018 and learn what they mean for retail in 2019. What must you do differently? What should you look out for and what do you need to think more about?
This is mainly focused on UK based news but there are stories from abroad too. These are stories which I feel will come to the UK soon and have their impact. Essentially, these stories show a sign of things to come.
Listen to the podcast above to hear the key lessons and takeaways for each month. For every month, I make a suggestion for how you should change or what you should consider going into 2019.
There were signs of things to come. Results from Christmas 2017 came in, showing that it wasn’t a great Christmas for bricks and mortar stores. It set the scene that retail in 2018 was going to be a tough journey.
But in January, there were 2 interesting stories that I touch upon in the podcast.
Firstly, Iceland pledged to go plastic free in 5 years – so by 2023. This action for environmental benefits was a key theme for the year and Iceland made the first moves this year.
Next, we come to Amazon. They launched their Amazon Go store to the public. Their Seattle based concept had been in beta testing but in January, they launched for real. And it’s getting rave reviews so expect to hear and see a lot more about Amazon Go in 2019.
February 2018 was a cold month for retail.
Firstly, we had the “Beast from the East” in the UK – which saw huge disruption to retail. Footfall and sales plummeted.
28th of February saw a very dark day for retail. Firstly, Maplin went into administration. Next Toys R Us went into administration. Finally, Prezzo announced their intend to close 100 of their restaurants. A hard day for retail.
Administrations and CVAs (Company Voluntary Arrangements) became an all too familiar story for retailers in 2018.
We started to see signs of positive outlook in March. Morrisons reported a great set of results in March. Importantly, this was both in stores and online. They’ve been on their transformation journey for a couple of years now and they’re starting to see the positive impact. Great news for retail as a whole.
In April, UK supermarkets Sainsbury’s and Asda announced a mega merger. To the tune of a whopping £51 billion. Whilst it is still going through competition reviews, this looks like it could happen. This would create a new super-power in UK retail, eclipsing the current king, Tesco.
Also, Wesfarmers sold Homebase for a massive loss, just 2
Finally, in May, it was confirmed that the Co-op completed their purchase of Nisa convenience stores.
In June, the company behind Walmart’s robot trials, Bossa Nova Robotics, completed a big funding drive, raising $29 million. This suggests that the trial they’ve been running with the US retailer has been rather successful. It suggests that we’ll see more of robots on the shop floor as we look to 2019. Read more here.
More bad news in July. Mothercare announced they were planning on shutting more shops than they originally expected.
This was more confusion on top of the CEO changes that they’d made earlier in the year.
In August, we had another major retailer going into administration. It was department store, House of Fraser’s turn. But, hours later, their future was secured as Sports Direct and Mike Ashley swooped in for a £90m purchase. Since this, Mike Ashley has been on a personal mission to secure as many stores as possible by negotiating with landlords.
This is all in aid of moving towards Ashley’s vision to turn House of Fraser into the “Harrods of the High Street.”
Burberry announce several major changes in September. They relaunched their flagship in Regent St. Also, they leaned more on their corporate values and also set out to improve their corporate social responsibility (CSR). Burberry delivered a whole package of changes to signal their future, their values and their brand to customers.
September also saw the launch of Jacks – a new discounter store by Tesco. (Now, I’ll be honest – this got unintentionally left out of the podcast!). It was a fairly major story at the time of launch but publicity has since died down as the operation beds down. However, in a very similar vein as Burberry, Jacks is based on some very clear values and propositions. So, I’m sure that we’ll be seeing more of this discounter as we go into 2019.
Amazon again stole headlines in October. They opened a pop up shop for 1 week only in London. Perhaps as you’d expect, there was plenty of tech in use in the temporary store. They also had a busy events schedule with experiences to book into every evening.
News that consumer purse strings were tightening was a common theme in November. With Brexit looming and many question marks over what that meant, people started to worry.
Also, Retail Economics reported that over a third of retailers have done little or no planning ahead of a hard Brexit. This is particularly worrying given the last minute panic that GDPR gave everyone. It suggests that many retailer are heading down that same route. This will not make for a pretty retail experience as Brexit hits in March and for the few months after that.
December saw Sports Direct’s Mike Ashley sit in front of MPs again. (I think he’s their favourite 🙂 ). This time, it was to discuss the state of retail and future of the high street. The government’s policies on business rates were under scrutiny. Plus, the whole argument of online retail being too easy was out on show too.
Mike Ashley followed that press up with perhaps the most bizarre retail story in this review. His loan proposition to Debenhams and more specifically, his desire to make his generous offer very public. Right before Christmas was a very odd time to do this and made many question his true intentions.
The bottom line – a tough year for retail
Retail in 2018 was hard. Many companies are closing out the year feeling bruised and battered. Unfortunately, we’re only half way through this battle and there could be more bad news to come in 2019.
What we have seen, loud and clear, is the need to transform. Retailers must take action to develop their operating model. You must focus on the customer (I mean really focus on the customer) and the experience that you serve them.
The Retail Transformation Show will be diving into all of this in future episodes.
What were the big retail stories affecting your world in 2018? Comment below and share your thoughts for what it means going into 2019.