2 minute read
THE WEEK IN RETAIL ISSUE 15
EDITOR’S COMMENT
STICK OR TWIST?
Coronavirus is certainly presenting local retailers with an array of interesting new challenges and, depending upon how you choose to look at it, many new opportunities. One of the most critical challenges facing all retailers is undoubtedly what to do about the huge spike in sales over the last few months. The vast majority of retailers have done very well through Covid-19, thank you very much, and while some will no doubt have used the extra funds to pay down existing debt, many others will have been rapidly building a war chest in recent months.
Broadly speaking there are two options here: stockpile the cash for a rainy day to help when the inevitable happens and times get tough again. That’s an attractive option, but is it the best possible use of those reserves? Is it perhaps better to put that cash to good use now when the tills are still ringing and try out some new strategies for growing and future-proofing your business for the longer term?
Those were the questions bouncing around my head as I interviewed Inverurie retailer Scott Graham for this issue’s cover story. Scott’s view of the dilemma above is pretty clear. He’s just completed the biggest refit of his store since he first took it over about 11 years ago. Granted, Scott isn’t having to dig too deep into his reserves because he quickly worked out that he could secure a non-repayable £25k Covid loan and combine that with the £20k or so he is going to save during his rates-free year to pretty much pay for the refit. Entrepreneurialism at its best, that.
But the fact remains that he could have saved the £45k or so and treated him and his family to a nice holiday or a new set of wheels – but Scott is clear that he views this Covid-inspired opportunity as a once-in-a-lifetime chance to build a store that will see him through the next 10 year lease that he’s just signed. He had been building up a list of things that he wanted to do to his store, principally to move GP from the industry-standard 20% or so to much closer to the 30% he reckons he needs to stay profitable and secure a sustainable business long into the future. This was his chance to bring his vision to life in brick, timber and snazzy vinyl's.
Working out what to do with spare cash is a rare and very welcome challenge for retailers – but it’s a hugely important issue. If nothing else, the last few months have shown us all that you never know what’s round the corner.
