Coronavirus threatens to finish off a high street that has spent years slowly lurching onto its side. High-street sales fell to their worst on record in March, sliding by 17.9 per cent, according to BDO. Emergency government measures including a 12-month business rates holiday and the deferral of VAT have helped to prop stores up, but the pandemic will likely have lasting effects on consumer behaviour and how we shop.
‘Essential’ status afforded to Kingfisher (KGF) kept its doors open in the UK, but the home improvements retailer elected nevertheless to delay its full-year results, scrap its final dividend and draw down on two revolving credit facilities totalling £775m. Other designated survivors have opted for a conservative interpretation of their privileged status. Newsagents have been allowed to continue operating as normal, but WH Smith (SMWH) closed around 60 per cent of its outlets. It has continued to sell in hospitals, post offices and small communities.
Most retailers have not been able to carry on with business as usual, though. Next (NXT) forecast a sales collapse of up to £1bn at its full-year results release in March. The closure of its stores was followed by a halt to online sales amid concern for worker safety at its distribution centres, in a bad sign for retailers hoping e-commerce would offset some of the toll of coronavirus with interest from bored, housebound shoppers.
The removal of business rates, and support from government on salary costs, provided some relief to the high street. Dixons Carphone (DC.) expects the measures to save the company £200m – a huge saving, given that the company made a pre-tax loss of £259m last year. Meanwhile, JD Sports (JD.) has confirmed that it did not pay its rent for the quarter.
As with other sectors, dividends were a frequent casualty in business updates, with Card Factory (CARD) among those to cancel its payout, having paid £21.9m in final dividends in each of the last two years.
See below for our entire FTSE350 review:
FTSE350 profitability: the direction is clear but not the severity
FTSE350 Review: Coronavirus and the dividend dilemma
FTSE350 groups scramble for cash
Aerospace on the descent as defence stays on course
Construction hits the brakes once again
Coronavirus threatens electronics and technology
Engineering and industrials braced for a downturn
Few guarantees for financial services
Coronavirus slams high street doors shut
Insurers stuck between policies and politics
Miners hold on to their hats in Covid rout
Supermarkets thrive but coronavirus harms other personal goods
Oil companies suffer Covid-19 crunch
Pharma giants entering the testing fray
Property income prospects dimmed by Covid-19
Subscription-based models make for sturdy businesses
Downturn threat obscures outlook for outsourcers
Are telcos still a defensive play?
