The retail sector in the UK experienced a significant downturn in 2020, marking the worst decline in 25 years according to The British Retail Consortium (BRC) and KPMG. The impact of the Covid-19 pandemic and subsequent lockdowns led to a 0.3% decrease in overall retail sales for the year. While e-commerce saw a boost and December showed some promise with a 1.8% increase in sales, the closure of physical stores had a devastating effect on the industry.
Food sales managed to stay afloat with a 5.4% growth compared to the previous year, but non-food sales, especially in physical stores, saw a sharp decline of around 5%. Categories like fashion, lifestyle, and homewares suffered the most, experiencing a staggering 24% drop in sales due to prolonged closures during lockdowns.
Despite the challenges faced by the retail sector, there were some success stories. Online non-food sales soared by 44.8% in December, showcasing a shift in consumer behavior towards online shopping amidst restrictions on physical stores.
Helen Dickinson, the CEO of BRC, lamented 2020 as the toughest year on record for retail, emphasizing the struggles faced by non-food stores during a crucial period like Christmas. Paul Martin of KPMG highlighted the positive growth in December and noted the redirection of consumer spending from sectors like travel and leisure.
Looking forward, Dickinson called for continued financial support from the government to aid struggling retail businesses. With the uncertain future of physical stores and ongoing closures, the survival of many retailers remains in jeopardy amidst the persisting crisis.
For more information on the impact of Covid-19 on the retail sector, you can visit BRC and KPMG.
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