Lockdown boost to online shopping helps Clipper weather Covid-19 storm

Clipper Logistics is experiencing unprecedented volume increases under lockdown with retail customers’ online sales outstripping Black Friday levels by 100%.

Announcing its trading update for the year to 30 April 2020, the company said it had weathered an initial period of disruption - as the Covid-19 lockdown saw high street retail clients’ stores close down overnight - to deliver a boost of activity from other quarters.

Clipper Logistics said this new activity has also helped contribute to a significantly larger tender pipeline, standing at £50m as of 18 May 2020.

In its annual trading statement the group said: “In particular, the company has provided support to online retailers with high e-fulfilment volumes, as some online retailers experienced extremely high levels of demand, regularly outstripping that seen over the Black Friday period last year.

“We are witnessing volume increases of over 100% on a like-for-like basis with some customers.”

Since lockdown Clipper Logistics has also rolled out additional services for supermarket customers including Tesco, Asda and Morrisons, in response to rising consumer demand under lockdown.

It has also landed a supply chain deal for the warehousing and distribution of PPE to hospitals and the provision of an online portal to fulfil PPE orders to GP surgeries, small care homes and home care providers.

Looking ahead, Clipper Logistics is predicting an increase in outsourcing, revealing it is in discussions with a “leading UK high street retailer” to take over their in-house operation.

The company is also looking at creating shared user transport networks for multiple high street retailers as they strive to cut costs in the wake of the impact of the pandemic.

Demand for Clipper’s Clicklink service is also expected to increase, the company said, under government moves to encourage the use of click and collect services to boost the economy whilst cutting congestion.

Clipper Logistics added that new activities brought on since lockdown, coupled with new contracts coming on stream in the first quarter of 2021 will add a further 1.5 million sq ft of space to Clipper's 10 million sq ft infrastructure.

The group added that financial performance was broadly in line with expectations, delivering an EBITA of around £24m for the year to 30 April 2020, an increase of nearly 19% on the previous year.

Revenue from the group’s European activities grew by 41.3% in FY19 and by a further 33.7% in FY20.

Steve Parkin, Clipper executive chairman said: "Throughout the Covid-19 pandemic, Clipper has continued to demonstrate its agility and ability to focus on customer service and providing innovative solutions in a rapidly evolving environment, highlighting the importance not only of robust supply chains but collaboration as well.

“At Clipper, we're now moving faster than ever, accelerating development and evolving to meet the expectations of both our retailers and their consumers, as the shift to online continues to accelerate.

“Nearly 70% of our revenue in both our UK and European logistics operations is derived from online retail. We are looking to the future with confidence."