The impact of Covid on businesses

Info is taken from the Office for National Statistics (ONS):

Overview

The economic downturn resulting from coronavirus (COVID-19) restrictions has been concentrated among certain types of business.

Overall, the UK economy, measured by gross domestic product (GDP), shrank by a record 19.8% in the second quarter (April to June) of 2020, following the start of the first lockdown on 23 March. By September 2020, GDP was still down 8.2% compared with February.

Services such as hospitality – including pubs, restaurants and hotels – recorded almost no output in April and May, but industries such as information and communication, where staff could largely work from home, saw little change compared with February.

Consumer-facing services have since bounced back to some extent, but they remain significantly smaller than they were in February. At this stage, it is difficult to separate temporary losses of output, brought about by coronavirus restrictions, from longer term behavioural changes that could affect industries for years to come.

 

Online shopping boosted

The enforced closure of shops selling non-essential items during the first wave of the pandemic led to a boost for online retailers.

The Office for National Statistics (ONS) October 2020 retail sales publication reported “online sales reaching higher than usual levels over the course of the pandemic”. Online purchases represented 28.5% of total sales in October compared with 20.1% in February.

The internet’s share of retail sales dipped after shops reopened in June but the proportion was increasing again in October. The extent of a structural shift in the behaviour of consumers remains to be seen.

While some parts of the retail industry recovered once restrictions were eased, in others, the temporary closures had effects that lasted beyond the first UK lockdown.

Dispensing chemists sold more during the pandemic

Dispensing chemists sold consistently more since the pandemic began than they did before. As one of the essential types of shop allowed to remain open during the first lockdown, their sales rose strongly in March 2020, but they carried on growing in June even after restrictions were eased and other non-essential stores were allowed to reopen. Non-specialised food stores, which include supermarkets, also traded consistently above their pre-pandemic levels.

Retailers that relied on customers being able to visit their stores – rather than selling online – recorded a big drop after they were ordered to close their doors. However, for furniture retailers, customers returned in the summer with trade returning to pre-pandemic levels and growing further, boosted by people still spending more time at home than they used to.

Maialisa / Pixabay

Holiday letting was down apart from camping

Even when restrictions in the UK were eased and people were allowed to go on their summer holidays, turnover in the accommodation industry was still down compared with a year ago.

That was not the case across the entire sector, with camping proving popular and even surpassing its performance last year. Some of this may be down to people deciding to holiday in the UK because of international travel restrictions and the possibility of having to quarantine on their return to the UK. Other types of accommodation, such as hotels, remained depressed suggesting that people may have believed it would be easier to socially distance on a campsite than in buildings.

Image by Pexels from Pixabay

Clothing and footwear sales down

Retail sales of clothing and footwear and leather goods fell in March and April 2020, as non-essential shops closed. Restrictions on social interactions meant people also had less of a reason to buy new clothes.

As students prepared to return to school in September and needed new shoes, sales of footwear and leather goods picked up significantly. As with other types of clothing, however, sales in September and October 2020 were still below their February levels.

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