British online supermarket Ocado Group PLC said that growth in the last three weeks was double that of its first quarter, as panicked shoppers stock up on goods ahead of an expected shutdown to tackle the coronavirus.
The pioneer of online shopping said it had been forced to stop registrations from new customers and impose a waiting system online after it saw a several hundred percentage increase in Web traffic.
Customers were also spending more and buying more ambient goods. The government has so far shut schools and advised people to avoid bars, restaurants and theaters, but it has warned it is ready to adopt more stringent measures to curb the outbreak.
Ocado said its guidance for 10 to 15 percent retail revenue growth for the whole year this year was unchanged, as it believes there is a large element of forward buying, leading to disruption further down the line.
“The impact of higher basket values and order demand, amid growing public concern over the coronavirus, was limited in the quarter, although this has since picked up significantly and growth in the second quarter is so far double that of the first quarter,” Ocado chief executive Melanie Smith said.
British clothing retailer Next yesterday said that the industry faced an unprecedented crisis due to the coronavirus pandemic, but said its balance sheet and margins would help it weather the storm.
The group, which has about 700 stores, with about 500 of those in Britain and Ireland, and also operates its online directory and catalogue business, said it was preparing for a significant downturn in sales during the coronavirus crisis.
It said that total brand sales fell 8.8 percent in the week starting on Sunday last week and were down 30 percent from Sunday to Tuesday.
Next said that, given the unprecedented nature of the crisis, it could not predict the extent of the effects on its retail and online sales.
It said its stress test showed that the business could comfortably sustain a loss of more than ￡1 billion (US$1.15 billion), or 25 percent, of annual full-price sales, without exceeding its current bond and bank facilities.
The company’s priorities were to keep its workplaces and shops as safe as possible for customers and staff, securing the cash resources of the business, and developing its online platform and product ranges throughout the next six months, it said.
Meanwhile, luxury British brand Burberry PLC warned that sales in the final weeks of this month would fall by about 70 to 80 percent compared with last year, as the coronavirus causes shops to close and demand for luxury goods to dry up.
Burberry yesterday said that it expected sales at comparable retail stores in the final weeks of its financial year to Saturday next week to be down between 70 and 80 percent, and as a result it expected overall fourth-quarter sales to be 30 percent lower.
The forecast for this month showed that the effects of the coronavirus were intensifying, with sales dropping off further from a level of being down 40 to 50 percent over the past six weeks.
It said it had ￡600 million of cash and a ￡300 million revolving credit facility, and was working to cut costs to help maintain a strong financial position.
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