Following today’s release of Shoe Zone H1 figures for 2019/20, Pippa Stephens, Retail Analyst at GlobalData, a leading data and analytics company, comments:
“While Shoe Zone made a promising start to FY2019/20, with total revenue up 2.6% to February, the impact of COVID-19 has drastically hindered its resurgence, as its entire estate was forced to temporarily close in March for three months. Though previous digital enhancements have helped online sales to rise 31.9% during H1 FY2019/20, it has not been enough to outweigh the lost sales from its store estate, with total revenue dropping £4.1m to £68.9m. In order to boost digital sales amid the outbreak, Shoe Zone has been running significant promotional activity to help generate revenue as quickly as possible. However, it must ensure that it does not become too reliant on this technique in the long term considering it will heavily impact its profit margins.
“The retailer announced today that it has permanently closed 20 stores, as it continues to focus on the expansion of its Big Box format, of which it had 47 locations operating at the end of H1 FY2019/20. As these Big Box stores are primarily positioned in retail parks, the easy accessibility and plentiful parking at these locations will be appealing to more cautious shoppers in comparison to high streets and shopping centres. Moreover, these larger store formats will allow for simpler social distancing, giving shoppers more confidence to visit. It should better communicate the safety measures it has in its stores, including Perspex screens, floor markings and maximum capacities, via its social media and digital marketing channels, to drive greater awareness of the steps it is taking to keep shoppers and staff safe. “Due to its reliance on footwear, Shoe Zone is particularly exposed to the waning demand for non-essential items amid the pandemic, as clothing and footwear has been the worst hit retail sector with UK spend forecast to decline by 31.4% in 2020. However, its comprehensive range of children’s footwear will be advantageous, with this sub-sector expected to remain the most resilient due to a greater dependence on replacement purchases. Shoe Zone’s value proposition will also enable it to quickly regain appeal following the crisis, as many consumers will begin to trade down as they start to feel the effects of the impending recession. While its main rival Primark was forced to halt trading in the UK for nearly three months due to store closures and a lack of a transactional website, this will have created an opportunity for Shoe Zone to attract new shoppers, so it must encourage repeat purchases through personalised emails and marketing to continue growing its customer base.”