By Oliver Gibson
It seems almost futile now, after half a year of Covid, to point out the radical changes that have happened as a result of the pandemic. Many aspects of life have been temporarily changed or altered for almost all people during lockdowns over the country and the rest of the world.
The economic impact of the Covid-19 pandemic has already been thoroughly discussed and dissected. However, the effects still continue to be seen to this day. Britain, in the second quarter of this year, has seen a reported recession of 20.4% – which is, needless to say, a huge hit on the economy and on consumers.
While the BBC and others have speculated that economic growth will occur in the third quarter, a recession of that size will have a lasting impact on British businesses and the high street.
What were people buying during the early lockdown?
While shops, bars, cafes and retailers on the high street closed for the lockdown, consumer spending on home-delivery items increased. Spending on streaming services, such as for films and TV, also saw increases.
The share prices of Netflix and Amazon, two retail titans, have seen continued growth since March of this year, largely due to increased sales and their advantageous positions in the market.
A YouGov report from June showed that half of Britons were spending less money during the lockdown than they otherwise would have done in normal circumstances. However, also shown by the report was the fact that consumer spending on groceries, alcohol and books increased quite dramatically.
A report by Waitrose found that the number of consumers doing their weekly shop online had doubled since before the pandemic. The same report stated that the trend was irreversible. Thus, it seems as though online providers, and supermarkets that offer goods for home delivery, will see continued high sales for quite some time, especially if the pandemic lingers on as has been touted by many experts.
What are people buying now?
Sky News has reported that the Government’s ‘eat out to help out’ scheme has done the world of good for restaurants over the UK. Consumer spending for meals out in restaurants has apparently increased by a third, with four in ten people taking part in the scheme on Mondays to Wednesdays.
With businesses continuing to reopen, and with the relative risk of the pandemic decreasing, it seems as though the economy could indeed see growth in the next quarter. With the reopening of colleges and universities, the high street could see a welcome increase in both foot traffic and in sales.
What will people be buying in the near future?
The housing market saw a decline in sales during the early lockdown. According to Zoopla, a total of 124,000 fewer house sales will occur this year than in 2019. That will mean that the number of total sales will see a decrease of 15%.
However, UK house prices saw an increase of 2% in August alone, presumably due to an increase in demand following the rolling back of lockdown measures and the economy getting back into action. This price hike would not do much to help first time buyers, though it may prove helpful to those who already own one. The Government’s new policy on stamp duty could, however, get first-time buyers back on the road to buying a house.
The car industry too saw a decline in sales during the lockdown. The Guardian reported just last month that over the first seven months of 2020, car sales were 40% lower than the comparative figures from 2019. Car retailers generally began their reopening processes in July, and this proved to be quite a good month for the car industry, with an estimated total of 175,000 sales taking place.
Despite all that has happened during the pandemic, Electric car sales have reportedly tripled since 2019. Electric retailers such as Tesla, which briefly topped the market this year, will no doubt be pleased with that news.
The next few months will likely prove interesting, with more of our shops and retailers reopening – and consumer spending on the high street may begin to normalise as a result.