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The future of retailing

Years of decline had left the UK’s high streets in a perilous position – and then COVID-19 happened. David Adams charts the fate of large and small retailers in lockdown, and the continued swing towards online while bricks-and-mortar outlets are out of action

LuxuryMarketThe COVID-19 pandemic transformed the retail sector within just a few days – much like the rest of the economy. On  16 March, the government issued advice about avoiding non-essential travel and crowds. This was followed by instructions for schools, restaurants, pubs, entertainment venues and leisure centres to close on 20 March. Then, on 23 March, most businesses, public amenities and places of worship were also closed, in addition to non-essential travel being banned and people being asked to practise social distancing by keeping two metres apart in public.

Retailers were already facing difficulties before the lockdown caused further damage to the sector (see Going down). Sales of food, alcohol and goods such as DIY equipment rose during the first few weeks of lockdown. Online sales also experienced a rise, going up by 8.3% in March to account for a record 22.3% of all sales that month, according to S&P Global Intelligence. But due to online sales still only being a small proportion of most retailers’ balance sheets, these gains were generally nowhere near large enough to make up for lost sales in bricks-and-mortar stores.