While non-essential UK retail stores may be reopening today (15 June), the boost will be short-lived with non-food retailers set to lose GBP37bn (US$46.3bn) this year, and the clothing and footwear sector is expected to be the worst-hit.
Around 44.8% of UK consumers have spent more online as a result of the outbreak, according to surveys of 2,000 nationally representative UK consumers conducted by data and analytics firm GlobalData in early May and early June 2020.
As a result of the change in shopping habits, GlobalData is forecasting online non-food expenditure will rise 14.3% this year, versus a pre-Covid forecast of +6.5%.
However, GlobalData lead analyst Sofie Willmott says the increase in online spending will not be able to prop up the total market as physical stores still account for the vast majority of sales.
As stores re-open today the firm expects to see shoppers queuing to enter, keen to browse and purchase while seeking a new source of entertainment after months of being at home. But it will take time for footfall to return to normal as many will remain cautious and choose not to visit shopping locations due to health concerns or money worries with job security and personal finances remaining a burden for many.
“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,” Willmott says. “However, we expect clothing and 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.”
A number of clothing and footwear players have already fallen victim to the pandemic with Monsoon Accessorize tumbling into administration last week before being bought by its founder. Others such as Oasis, Warehouse, and Laura Ashley have also been rescued but their stores left out of deals leaving even more empty units on high streets which landlords will struggle to fill.
“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,” Willmott adds.
“We are set to see more store closures throughout the remainder of 2020 and unfortunately many more retail casualties as business struggle to offset their higher costs driven by essential safety measures, against lower sales.”