Pandemic to leave £37bn hole in non-food spend

By

Barbara Santamaria

Published
Jun 16, 2020

Despite evidence to the contrary, store footfall numbers will take a long time to return to pre-Covid19 levels, new research has found.

Crowds of shoppers flooded city centres and other locations across England on Monday after months of being at home as non-essential stores reopened for the first time in 12 weeks.

Images of long queues forming outside stores came as a welcome relief for the retail sector that has been battered by the government’s lockdown restrictions.

But GlobalData, a data analytics company, has warned that the boost will be short-lived and retailers will still lose £37bn this year.

This is despite an expected increase in online spending, with 4.8% of UK consumers spending more online as a result of the outbreak. Indeed, online non-food expenditure is forecast to rise 14.3% this year compared to 2019, up from a pre-Covid forecast of 6.5%.

E-commerce may be surging, but retail sales in physical stores are not immune to new pressures. Many UK consumers remain cautious about shopping in public places and job security worries are likely to impact discretionary spending. 

Sofie Willmott, lead analyst at GlobalData, said: “Clothing is the product area that most visitors are looking forward to shopping for as they start to anticipate a return to social activities and buy into new season trends. 

“However, we expect clothing & footwear to be the worst hit sectors this year with spend predicted to fall over 30% as shoppers are unlikely to buy more to make up for their lack of purchases across March, April and May.”

The data comes from a survey of 2,000 nationally representative UK consumers conducted in early May and early June, a period that has seen several clothing and footwear firms fall victim to the pandemic.

Willmott concludes: “The queues we will see on high streets today may look promising for retailers and although they will at least be able to trade from their store locations now, footfall and spending will take a long time to return to pre-Covid levels. We are set to see more store closures throughout the remainder of 2020 and unfortunately many more retail casualties as businesses struggle to offset their higher costs driven by essential safety measures, against lower sales."