Adairs’ online sales more than triple during shutdown

Heather McIlvaine

5th May 2020

Adairs is the latest example of a major multichannel retailer to enjoy a strong online boost in recent weeks, as consumers shifted their shopping habits from stores to laptops and smartphones.

The retailer has reported a 221 per cent increase in online sales over the five weeks to May 3, 2020, the period when its bricks-and-mortar stores were temporarily closed due to the coronavirus.

On Monday, Adairs said it would start reopening stores from Thursday, May 7, with new safety measures in place, including hand sanitiser, contactless payment, customer capacity limits and less stock density to facilitate social distancing.

The store closures, and drop in consumer sentiment following the Government’s orders for Australians to stay home, have affected overall sales, with total sales down 37 per cent year on year.

But Adairs said its e-commerce growth exceeded expectations. Around 30 per cent of the increase in online sales during the shutdown came from customers who were not members of its Linen Lovers loyalty program or had not previously shopped online with the company.

Mocka, the online-only furniture and homewares site that Adairs acquired last year, also saw sales rise over the five weeks to May 3. In Australia, sales rose 151 per cent, and in New Zealand, where non-essential e-commerce businesses were not allowed to trade until April 28, sales rose 216 per cent year on year for the six days to May 3.

This is in line with other major retail chains forced to close stores due to the coronavirus. Kathmandu said its online sales were 2.5 to 3 times higher in April than last year, and Accent Group’s average daily online sales roughly quadrupled in the last two weeks of April, compared to the period before stores were closed.

Now that some states are beginning to ease restrictions and consumer spending is showing signs of recovery, companies are starting to reopen stores. But Accent Group’s Daniel Agostinelli at least believes the shift in consumer behaviour will last beyond the current crisis.

“It is clear that there has been a seismic and most likely enduring shift in consumer behaviour away from traditional shopping centres to shopping online,” he said.

“With 18 websites and our leading digital capability, Accent Group is capitalising on this trend. We will continue to drive digital growth as the number one priority in our company.”

Adairs said it is in a good financial position, with a strong balance sheet and liquidity and significant headroom within banking covenants. It has applied for Jobkeeper in Australia and expects to receive it, and has received the Government Wage Subsidy Scheme in New Zealand.