Myer brings back 2,000 staff as online sales surge

Department store Myer (ASX: MYR) has today announced a four-week extension of its temporary store closures, but the news came with a silver lining.

Following the Federal Government's social distancing measures, Myer has opted to keep its physical stores shut until at least 11 May but has a view to reopening "as soon as possible".

Online sales used to be Myer's Achilles heel as it struggled to keep up with a rapidly changing retail environment, but e-commerce has been integral to the company's turnaround strategy.

The company's online business has been performing so strongly since 29 March that 20 per cent of team members - or 2,000 of the 10,000 who were stood down last month - have been asked to return to work to support online fulfilment.

"The strong growth in the online business during the past few weeks has been particularly encouraging," says Myer CEO John King.

"The decision to extend the period of temporary closure of all physical stores was extremely tough, but it is reflective of our continuing focus on operating our business in a manner that protects the health and wellbeing of customers and team members, whilst supporting the government efforts to limit the spread of COVID-19 through stay at home directions and other social distancing measures.

"Our plans for reopening our physical stores are well advanced and we look forward to welcoming customers back into stores, when it is safe to do so."

The announcement comes shortly after major e-commerce player Kogan.com (ASX: KGN) reported its highest monthly increase in active customers in March since its 2016 IPO.

Elsewhere in retail, Woolworths (ASX: WOW) this morning announced it had doubled its online capacity over the past month, while a new "Pop-Up" Delivery Hub will be opened at a at a 7,000 sqm warehouse in the Melbourne suburb of Notting Hill by the end of the week.

"We're seeing a big increase in demand for home delivery as more and more customers seek to limit their outings in the community," says Woolies managing director Amanda Bardwell.

"We've worked hard behind the scenes to find innovative ways to provide this much-needed additional delivery capacity across Australia. In partnership with Sherpa and Drive Yello, we now have a highly flexible and scalable way to meet the needs of many more of our online customers in the weeks and months ahead."

The Commonwealth Bank's (ASX: CBA) latest Household Spending Intentions (HBI) series found consumers' intentions to spend at retail jumped substantially in March.

"The surge in spending in March was likely related to consumer's response to the developing Covid-19 shutdown and a jump in spending on supermarket items, alcohol and household equipment and furnishings," CBA said in the series.

The Australian Bureau of Statistics' (ABS) preliminary retail trade figures show those intentions translated to action, with retail turnover up 8.2 per cent last month.

"This is the strongest seasonally adjusted rise ever published in the Retail Trade publication, surpassing an increase of 8.1 per cent in June 2000 when households brought forward expenditure ahead of the GST implementation," the bureau said.

As mentioned by CBA, the ABS notes unprecedented demand in March in the Food retailing industry.

"Additional analysis indicates monthly turnover doubled for products such as toilet and tissue paper, and rice and pasta. In addition to food retailing, sales were also strong in retail industries selling items related to home offices for example," the ABS said.

"The rises were slightly offset by strong falls in industries including cafes, restaurants and takeaway food services, and clothing, footwear and personal accessory retailing, which were impacted by new social distancing regulations introduced in March."

Updated at 3:25pm AEST on 22 April 2020.