By Paul Weber, Society of Professional Accountants director.
Many of you will have clients who operate in the retail sector, most of whom would usually be licking their lips at this time of year as the golden quarter gets under way.
But, as we all know, 2020 has been a year like no other.
With a second wave of COVID-19 imposing local restrictions on large parts of England, this year’s golden quarter – which features Halloween, Bonfire Night, Black Friday, Cyber Monday and Christmas in quick succession – risks being seriously derailed.
When you take a step back and think about the figures involved here, that’s potentially a large chunk of bricks-and-mortar retailers’ income gone. A bitter pill to swallow for many who were already struggling with online competitors and subsequent falling footfall, plus crippling business rates.
Of course, those retailers who have an online presence might hold onto hopes of having a truly golden quarter, but there is still the issue with the virus disrupting supply chains and the possibility of lower demand should COVID-19 force the cancellation of Christmas itself this year.
Health of the high street
According to figures from the British Retail Commission (BRC), high street footfall slumped by 37% year-on-year in September as local restrictions were introduced affecting around a fifth of the population. Shoppers are choosing to stay at home.
“It is likely that rising case numbers and future restrictions may see footfall decline in the coming months,” said Helen Dickinson, the BRC’s CEO. “Sales at upcoming holidays, including Bonfire Night, are likely to remain muted.”
With that in mind, if you have any clients in this situation, advise on managing cashflow and forecast worst-case scenarios to prepare contingency plans for the winter and possibly beyond.
Golden quarter tactics
The Black Friday and Cyber Monday weekend at the end of this month has become one of the most significant retail events of the year in recent times, particularly for electrical and technology retailers.
In recent years, online retailers have become better prepared for the Black Friday rush with improved website and ecommerce capacity. This enables them to spread the deals over different times of day, or even different days.
For Christmas shopping, the BRC is urging consumers to shop early and prevent the last-minute rush, adhering to social distancing measures to give space to fellow customers and those working behind the scenes.
How can you support?
Even before nationwide lockdown struck back in March, I was a big advocate of having a functioning website. Last year, I read extraordinary statistics that said 40% of SMEs had no online presence and 30% of British businesses do not have a website.
If you have clients who fall into this category, they need to put that right – and fast. While that’s not your area of expertise, you will surely be familiar with the benefits of using digital tools like invoicing and payments, customer service, chat and automations in your accountancy practice.
For all retailers, it’s absolutely essential they are completely digital. Implementing those functions could significantly increase their monthly revenues and dramatically improve cashflow.
Alternatively, you might be in a position to help a struggling startup to pivot by launching a new product or service that drastically changes the business’s direction. Usually that depends on having a niche idea, but you should be there to advise if they do.
For ongoing insight you can use with your clients, email me at firstname.lastname@example.org