Covid-19: UK retail spending to fall by £12.6bn

The impact of the coronavirus pandemic will wipe £12.6bn from retail sales this year, according to the latest forecast by GlobalData. The data and analytics company said that the figure was the equivalent of Aldi’s total UK sales last year. The total retail market for 2020 is now expected to reach £333.7bn, which is 1.7% less than the year prior. GlobalData had originally forecasted a total spend of £346.3bn, which would have been a 2% increase from 2019. Clothing and footwear spending is expected to fall by 20.6% to £11.1bn, significantly down from the previous growth forecast of 0.6%. GlobalData said that the sector will have lost a fifth off of its market value in 2020, which is the equivalent to the combined clothing sales of Primark, Marks & Spencer and Next. The group said that clothing and footwear would be the “worst hit” retail sector amid the pandemic due to its “non-essential nature” and the “eliminated need for new clothes as the public avoids social interactions”. It also said that the upcoming spring/summer clothing season would be a “write-off” for retailers and designers. Food and grocery sales are expected to grow at an “unprecedented rate”, however. The previous 2020 forecast for this sector was a sales growth of 1.2%, but it is now expected to grow by 7.1%, adding £6.8bn to the previous forecasted annual spend. GlobalData said that the additional growth stems from “a significant uplift” in sales due to higher demand at supermarkets as the coronavirus has unfolded. Consumers transferring their spend from foodservice operators to supermarkets and food retailers has also impacted these figures. Patrick O’Brien, UK retail research director at GlobalData, said: “While the food and grocery market will grow at 7.1% - the fastest rate for decades - this will not stop the overall market falling as non-food spend is forecast to drop by 8.9%. “The impact on non-food is far worse even than during the financial crisis of 2009, when sales fell 2.9%. Clothing and footwear sales are forecast to be hit hardest, with sales down over 20% on 2019.” All forecasts are predicated on the pandemic peaking in April, with most stores either closed or severely affected until late May, with non-food spend starting to recover in June, but with more normal spending patterns not arriving until October.

Covid-19: UK retail spending to fall by £12.6bn

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