#RetailEXPOVC: Ex-Waitrose boss on the post-Covid retail world

The post-Covid 19 landscape for retail will be one of significant opportunity for new businesses and independents, while developing unique intellectual property (IP) and focusing on innovation will allow the sector to reboot, according to ex-retail executive Mark Price.

The former managing director of Waitrose and ex-deputy chairman of the John Lewis Partnership, who was giving the keynote on day one of the RetailEXPO Virtual Conference, warned the road ahead will be challenging due to severe economic and multiple practical issues resulting from the coronavirus pandemic.

In a wide-ranging presentation, Price warned the business community – of which retail and hospitality is the largest sector – will likely be tasked with contributing substantial taxes to help UK government pay back high levels of coronavirus borrowing. But he also called on the government to further recognise the battle facing these sectors.

“The real challenge is how to run a hospitality or retail business at sub scale,” he explained.

“We all know the industry is working on small margins often of 3-5%. It’s highly likely post Covid that a large proportion of consumers won’t return to the high street immediately.”

He cited China, where post lockdown retail and hospitality volumes have returned to around 50% of the pre-coronavirus level and are not expected to reach 100% four or five months after reopening.

“My personal hope is the government will expect it will take longer for retail and hospitality to reboot in the UK and therefore is prepared to extend any support it might be able to offer.”

Technology, indies, and localism

Since Covid-19 took hold in the UK, Price said there has been a “huge cash squeeze” on start-ups due to invoices not being paid and orders not flowing through the doors, but he also suggested retail businesses that continue to establish their own IP are set to win in the new environment.

“I’d spare no expense at the moment on innovation and IP,” he stated.

As shops, and retail more generally, begin to open again over the coming months, he predicted there will be a “nervous” customer, and suggested video and tech-enabled communications that link at-home shoppers to stores could become more popular. Indeed, he was talking on the day Dixons Carphone said that such services had proved valuable for its Nordic operations during the health emergency.

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Price estimates the current environment will have educated consumers about the benefits of online shopping, resulting in the acceleration of digital retail growth and the more challenging real estate economics that accompnay it. And he argued there will be yet more success for discounters in the coming years, as consumers remain cautious.

“What [products are sold at a premium], what IP you own and control, and how you innovate will all be key, I think, to having a differentiated strategy to either what the discounters are doing or, frankly, what Amazon is doing,” he noted.

“I do think there’s an opportunity for entrepreneurial people to start up smaller businesses and leverage the internet, and grow in that way,” he commented, adding: “I expect to see fewer multiples and more independents.”

Greater localism could become a factor in the post-Covid world, he said, with many communities having realised the benefits of the smaller, independent operators during this crisis.

It also remains to be seen whether the UK government will become more protectionist as a result of the crisis. A more limited global supply chain and the nation looking to become more self sufficient in terms of manufacturing and business operations would have implications on the cost of goods for consumers, Price said.