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As the Omicron outbreak dissuades consumers from browsing in-store, Universal Store’s (ASX: UNI) Millennial and Gen Z customer base have been splurging online.
In an ASX trading update released today, the Brisbane-based retailer reported in-store sales dropped by 10.8 per cent year on year but noted online sales surged by 52.5 per cent.
This shift to e-commerce accounted for 19.3 per cent of total sales ($20.9 million) in the first half of FY22, while sales had dropped by 8.2 per cent in comparison to the first half of FY21.
“Increased investment into digital marketing and our omnichannel model means that when demand in our physical stores is hampered as a result of COVID-19 and government restrictions, we see a level of diversion of this demand to our online channel,” Universal Store said.
The company noted the recent Omicron outbreak has resulted in “lower levels of foot traffic in stores” and increased difficulty “in the level of staffing changes needed to respond to cases and close contacts within our teams.”
Government-mandated store closures in the past six months have resulted in the loss of 3,192 trading days across New South Wales, Victoria and the ACT.
However, the shutdowns have done little to impede Universal’s goal to reach 100 stores across Australia and New Zealand, with the company already rolling out nine new stores in the first half of FY22.
Of the new openings, seven comprise Universal Store sites and two are Perfect Stranger stores.
The company said it has “not experienced disruption to operations arising from COVID-19” and that “shipping challenges” have been factored into its modelling and forecasting.
Shares in UNI went up by 7.86 per cent to $6.86 per share by the market close today.
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