Covid-19 has exacerbated existing socio-economic tensions as well as creating new issues. This is also apparent in business – particularly with the retail sector. On its onset, retail has been one of the most severely affected industries, with one of the highest numbers of job cuts
Department stores are among the UK’s most well-known chains to announce closures and cuts. Previously high end department stores had fared better than their mid-market rivals who have been feeling the strain for some time. Nevertheless, last week Selfridges announced the loss of 450 jobs, after Harrods reported that 700 jobs had been cut - so is it all bad news for the retail sector? Whilst some evidence shows consumers are buying less, they have not stopped buying completely. Consumers are buying different products in a different way. Commentators state “the current consumer behaviour on the internet has turned around by 180 degrees” due to the pandemic. For example, the title of “lifestyle brand” is no longer necessarily a sign of success. Certain aspirational fashion brands built around belonging, originality and lifestyle are predicted to be hit hard. A designer handbag is a harder sell when consumers are working from their kitchens and partying on zoom…
Consumers have been house-bound for months, and summer 2020 sees many Brits continuing to work from home and enjoying “staycations”. It’s surely no coincidence that homeware retailer Dunelm is rising in the FTSE 250 and in July reported “significant” online growth. Similarly, craft supplies and sports equipment remain attractive purchases and in fashion, sportswear, “homewear” and loungewear reign supreme.
Consumers are not only purchasing items for use at home but are purchasing from the home. Re-opening shop doors has not dented the e-commerce market. With a nod to the dominance of online shopping, Argos has discontinued its famous shopping catalogue – a UK household feature for almost 50 years. JD Sports has also reported that footfall is lower with shoppers “nervous” about enclosed spaces
In other news the UK’s largest pet supplies retailer, Pets At Home, recently reported “exceptional demand”. Annual profits are expected to be higher than usual with the company stating that pets played “an increasingly vital role in our lives” during the pandemic, though some warn this may be temporary.
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