1. Comment
November 5, 2020

The Works faces another challenging chapter amid second wave of lockdown restrictions

By GlobalData Retail

The Works has revealed its key weakness amid the pandemic; a heavy reliance on its 530 stores. Seven weeks of temporary store closures dragged down total sales (-7.1%) as the retailer struggled to shift spend online, despite high demand for categories such as books and crafts. However, a positive l-f-l performance since stores reopened (+10.6% for the 19 weeks to 25 October), combined with net cash of £8.4m, will support the business through upcoming headwinds.

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

With its value proposition, The Works is well-placed to benefit from consumers trading down amid financial uncertainty. But, unlike the previous lockdown, schools and universities remain open, and consumers can take unlimited amounts of exercise outdoors, which will have a negative impact on demand for crafts and games. The discount retailer will also not benefit from the release of a Hollywood film like it did in Christmas 2019, when it experienced a strong performance from Frozen 2 merchandise. To combat this, The Works must cast a stronger focus on products that improve mental health, such as adult colouring books, during the winter lockdown.

Though online sales growth at The Works remained strong as stores reopened (almost doubling in the 19-week period), this will have come from a small base. The discount retailer must invest in fulfilment to encourage online purchases, as delivery for orders under £30 costs £2.99, and orders arrive within 7-9 working days, which pales in comparison to Amazon ’s same/one-day Prime delivery.

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.