Businesses across all industries have financially suffered as a result of the pandemic. Just as we thought life was returning to something close to normal in the UK, tighter lockdown restrictions forced many of us back into our homes once again. Despite current events drastically damaging the wealth of the UK’s hospitality and entertainment sectors in particular, we’ve seen them adapt their business operations to reflect current circumstances and get back on track to success once again.
With this said, there have been some businesses in particular that have experienced a financial boom since lockdown regulations began back in March this year. For these businesses, they were placed at an advantage when it comes to selling products that can be best used in the comfort of people’s homes. They have adapted their operations to place domestic living at the heart of their business plans.
Here with Snowshock, provider of commercial slush machines, we discuss the top four businesses that have not only survived but prospered in 2020. We will also explore how exactly this has been achieved.
Amazon’s record breaker
Amazon specialises in e-commerce, selling everything from clothes to cars, to computers. It seems the pandemic played advocate to owner Jeff Bezos’ financial success, as recent reports find his net worth has exceeded the £200 billion mark. This set a record in financial history as the world’s richest man.
Ever since the world implemented lockdown restrictions that forced the majority of us to spend several months indoors, his e-commerce business became a hotspot for online sales from individuals across the globe. This saw him gain power over 38 per cent of the e-commerce market.
So, how exactly did Bezos almost double his profits? First of all, since Amazon allow businesses from the majority of industries to sell their products via their site, those businesses’ in-store based competitors were inevitably placed on hold for the unforeseeable future. Already, Amazon’s dominating presence in the market was heightened by a lack of competition.
The next is the increased profit margins achieved by paid advertisement. It was reported by the first quarter of 2020 that Amazon experienced a 44% increase in revenues produced by selling advertisement. This generated $3.9 billion in just a few months. As businesses fight to keep their presence in the market throughout these difficult times, the demanding need for advertisement has inevitably benefited Amazon’s profits.
Other than Amazon’s successful e-commerce market, its additional products and services have boosted its financial success even more. The likes of Amazon Prime, a paid subscription service that allows members to access a wider range of movies, TV series, music etc., has also seen an increase in popularity over recent months as more and more people spend time cosied up in front of the TV.
Just Eat filling the nation’s stomachs
Helping bring our sorely missed restaurant cuisines direct to our door is online delivery provider Just Eat. Established in 2001, Just Eat has become a go-to delivery service for millions of households worldwide.
It’s no secret that the UK has a unified love for takeaway nights in front of the TV every once in a while. This adoration has only accelerated over the first six months of 2020 for Just Eat, as they reported over 77 million orders in the UK alone.
Just Eat has also acquired many new businesses partners in order to encourage their customers to purchase their food at home. Food suppliers such as Greggs and McDonald’s are amongst the many that have partnered with Just Eat this year and have excelled their financial success.
B&Q: the role that lockdown DIY had to play
Many of us chose to invest our time during lockdown into some DIY projects to do around the house. B&Q sales margins have greatly appreciated the nation’s new-found hobby. So much so, it’s recorded that the DIY and home improvement retailer witnessed profit margins soar by an incredible 25 per cent by June this year.
From painting the garden fence to renovating spare rooms that have been left untouched for years, B&Q is the ultimate provider for all things DIY. However, B&Q’s financial success is not the only home improvement provider that has seen their profits soar. The likes of Kingfisher has also jumped on board the nations DIY habits trend.
B&Q has placed an emphasis on their website’s advice and ideas section to help inspire users’ kitchen, garden, cabinets, and even sink-DIY aspirations.
Supermarkets soaring profits
As the world fought over toilet paper and milk cartons, supermarkets including Tesco and Sainsbury’s sat back, relaxed, and watched sales margins soar. Unlike their rivals Morrisons, Aldi, and Lidl, Tesco placed an emphasis on home deliveries during lockdown, resulting in an 8 per cent increase in sales to £13.4 billion in just 13 weeks to May 30th.
Contributing another large sum to Tesco’s profits, their online delivery service has experienced a 49 per cent increase in online sales and peaked at 90 per cent in May this year. To help continue their online ordering success, Tesco were quick to notice that home deliveries weren’t going anywhere anytime soon and invested in the process of doubling their capacity. Their investment has paid off too, with their previous 600,000 delivery slots jumping to 1.3 million over a five-week course during the pandemic.
As for Sainsbury’s, they too have seen profit margins boom over the recent months. The first quarter of the year drew in 8.5 per cent higher sales margins. Similar to Tesco, they too have highlighted the nation’s demand for online deliveries, increasing their online orders from an average of 370,000 per week to 650,000 per week this year.
Throughout this time, Sainsbury’s has also used the pandemic to improve their businesses image. They have reported employing more than 25,000 staff to help support the surge of furloughed workers and redundancies during lockdown, and have also provided paid bonuses to 157,000 staff members to show their appreciation to their staff that have worked continuously throughout these tough times.
From online deliveries to Amazon’s gold mine, these businesses have been rewarded by significant increases in sales and profits. However, when the world begins to return to normal, how will they cope when their competitors return to the market once again?