The impact of the COVID-19 pandemic continues to be felt across the economy. Over the last few months, no business, sector or activity has been spared its effects, leaving the UK at the start of what could be the deepest recession for generations.
The retail and leisure sectors have been particularly hard-hit, with enforced lockdown effectively closing town centres and high streets overnight. Many consumers have increased their online spending as a result: ONS data for April 2020 shows total retail sales down by a record 18%, but the proportion spent online soaring to the highest on record at 30.7%. Even though food stores have remained open throughout lockdown, the impact on food sales has been particularly stark, with an 83% rise in year-on-year online grocery sales.
In a post-COVID world, retail may no longer be the main reason that most people visit their high street. But there are reasons to believe that – with some evolution and adaptation – the high street can survive.
Adapting to new challenges
The businesses that have survived these tough months are now enjoying a gradual loosening of trading restrictions. But the retail and leisure sectors still face considerable challenges, having been closed for over three months. These months would usually have been some of the busiest trading periods and many shops are now left managing a backlog of stock that is out of season and unlikely to be sold.
Looking ahead presents major challenges, not least as social distancing measures decrease trading efficiency for many shops, bars and restaurants, further impacting profitability.
Together, these current and future issues make an already difficult pre-COVID trading environment even more challenging. Unfortunately, it’s likely that many more businesses will cease trading before the end of 2020 – joining a long list of household names that have fallen victim to COVID-19.