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The Chancellor’s Budget and what that means for the road ahead

16 Mar 2021

Peter Flood looks at the recently-announced UK Chancellor’s Budget and what the details mean for UK essential and non-essential retailers; as well as covering some interesting moved in the green bonds market, and from Amazon Go, Ocado, ASDA and Waitrose.

Hello and welcome to This Week in Retail. As the dust settles following Boris Johnson unveiling of the roadmap back to normality, it’s fair to say there is a lot to look forward to as the lighter evenings roll in and we head towards key milestones on the 12th April when non-essential retail is fully opened and 21st June when all lockdown restrictions are lifted.

We start this week with news that non-essential retailers will be eligible for grants of up to £6,000 through the “restart grant” scheme which was announced as part of Wednesday’s Budget by Chancellor, Rishi Sunak. Further positive news for retailers comes in the shape of the new Recovery Load Scheme which will replace the previous Covid-19 loan packages, allowing businesses of any size to apply for loans from £25,000 up to £10m until the end of the year in addition to the restart grant.

It’s also interesting to see how government policy is aligning itself with trends in the retail space by providing the opportunity for retailers to invest in the new green savings bond and contribute towards projects that will support the government’s target to reach net zero carbon emissions by 2050. We’ve seen over the last year especially that sustainability is a topic that is becoming increasingly important to consumers and an area that many retailers have tried to leverage to increase their market share so it’ll be intriguing to see how this develops throughout the year.

This week has also seen news that Amazon is set to open the first out of a proposed 30 Amazon Go stores across the UK. Shoppers will pay via the Amazon Go app with their credit or debit card linked to their account. The contactless experience is said to work using the same type of technology as self-driving cars to detect when a consumer picks up a product.

News of Amazon’s UK expansion into the High Street has coincided with Ocado opening a new mini customer fulfilment centre (CFCs) in Bristol which has the capacity for over 30,000 orders a week. Further plans are in place to open two additional CFCs which are expected to boost Ocado’s capacity by 40% and will support the online retailer to respond to the increase in demand throughout Lockdown which saw its share price rise by 117% since the start of the first lockdown. Similarly, ASDA has also unveiled a new business transformation plan which focuses on three different parts of its business to create simpler, more efficient ways of working for employees. The most notable of which is instore picking for online orders in the South to offer greater capacity, improve slot availability and increase opportunity for customers to utilise same-day delivery, express one-hour collection and Uber Eats delivery.

Also, this week John Lewis has set out plans to launch hundreds of shop-in-shops inside Waitrose stores. John Lewis Partnership chair Dame Sharon White said she wants most of Waitrose’s 331 stores to contain a John Lewis implant within the next 12 to 18 months. The move comes as the retailer looks to reduce property costs, enable cross-selling and re-establish its position within the digital market but offering a wide-range of general merchandise online.

We round off this week looking at Zip’s buy now pay later service which is set to launch for the first time this week in the UK with Homebase, Boohoo and The Fragrance Shop among the first users. The service will allow consumers to pay in four interest-free instalments across sales channels and aims to provide customers with increased flexibility, which will certainly be a welcomed boost as we head into the new normal.