Plastic pollution remains the top issue on everyone’s minds – with 46% of people citing this as the ethical issue most important to them. However, the tides are changing and we can already see that among the younger generation climate change is deemed more important. Consumers are heavily influenced by current situations and with so many impactful protests about climate change throughout 2019 it is no wonder this is now higher on the agenda for many.

Since the onset of COVID-19 the new focus is on community and people. Three in five people felt strongly that retailers were responsible to protect their staff’s health and livelihoods as much as possible at this time. Three in five said that retailers should only operate if they are able to socially distance and that they should protect staff financially. Many consumers are aware of which retailers were responsible during lockdown, while those that were not made headlines.

However, many shoppers will not be able to afford to be picky. With the economy now in recession and many worried about what this means for their financial stability, shoppers could begin to trade down. With so many equating shopping ethically with spending more, customers are likely to trade down and shop wherever is most convenient and affordable, especially as special offers were deemed one of the main draws when buying a product.

That said, there remain ethical and sustainable opportunities for retailers. Many affordable retailers such as Tesco and IKEA are working on ethical and sustainable initiatives such as reusable packaging and plant-based foods and should be signposting these and highlighting them to customers both in-store and online. It is time that shopping ethically was not seen as something only for those who are more financially stable.

Key issues covered in this Report

  • The impact of COVID-19 on the ethical retailing market.

  • How consumers expect retailers to behave in light of COVID-19.

  • Issues that are deal breakers for consumers when choosing a retailer.

  • Consumer attitudes towards ethical retailing

Products covered in this Report

For the purposes of this Report, Mintel has used the following definitions:

This Report is designed to give an overview of ethical retailing, across the main retailing categories (grocery, home and fashion). For the purposes of this Report, the term ethical covers concerns including but not limited to:

  • Animal welfare

  • Environmental concerns

  • Social responsibility (treatment of workers, charitable endeavours)

  • Promotion of diversity.

COVID-19: Market context

This update on the impact that COVID-19 is having on the market was prepared on 13 August.

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential stores on 20th March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23rd March. Initially, a three-week timeframe was put on the measures, which was extended in mid-April for another three weeks.

The Health Protections Regulations 2020 came into effect on 15th June allowing the reopening of all non-essential stores in England as well as the mandatory use of face coverings on public transport. However, Leicester became the first city in Britain to be placed in a local lockdown on June 29, after public health officials voiced concern at the city's alarming rise in Covid-19 cases. Non-essential shops were closed until 24th July and nail bars, outdoor pools and beauty salons were allowed to reopen in England from 19th August. In the rest of the country, pubs, restaurants, hotels and hairdressers were able to reopen on 4th July.

From 24 July, it became mandatory to wear face coverings in shops and supermarkets.

During August further local lockdowns have been ordered in Aberdeen, Greater Manchester, East Lancashire and parts of West Yorkshire.

Economic and other assumptions

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its July 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP could fall by 12.4% in 2020, recovering by 8.7% in 2021, and that unemployment will reach 11.9% by the end of 2020, falling to 8.8% by the end of 2021.

The current uncertainty means that there is wide variation on the range of forecasts, however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

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