What you need to know

Like most markets, the retail market continues to be significantly affected by COVID-19, although whether the impact on individual retailers has been positive or negative depends heavily on the category they operate in.

Online retail never went away, but is still going through something of a resurgence due to the pandemic. This has benefited specialists in the market, but will also offer new opportunities for retailers to futureproof their offering by expanding their online options and involving more technology to make the experience positive. For example, brands can take inspiration from Currys PC World and The Perfume Shop, which are using video calling with experts to encourage purchases in an area heavily determined by in-person trial.

Amazon remains dominant in the retail market, helped by its Prime service, and is influencing the market beyond its own proposition. For example, other retailers have relaunched their loyalty schemes in 2020, with Tesco exploring free delivery for its Clubcard Plus subscribers. Such services can help to add value at a time where consumers will be inclined to cut their spend wherever possible.

COVID-19 will introduce even more ethical factors that need to be appropriately dealt with, particularly related to the treatment of people; for example staff, vulnerable members of society or NHS workers. But while retailers have certainly increased their ethical activity over recent years, it is important to note that those with strongest heritage in this area are most readily recognised for their efforts, like The Body Shop, Lush and Co-op. Brands should seek to push new ethical initiatives in the short term, but will need to recognise that it may take longer for these actions to filter through into consumer consciousness.

Key issues covered in this Report

  • The impact of COVID-19 on retailers

  • Usage of leading retailers

  • Top scoring retailers on metrics like trust, preference, differentiation, and satisfaction and recommendation

  • The top scoring retailers for personality traits including ethics, customer service, value and exclusivity

  • Retailers particularly noted for online service

COVID-19: Market context

This update on the impact that COVID-19 is having on the market was prepared on 2 November 2020.

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 20 March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. The Health Protections Regulations 2020 came into effect on 15 June allowing the reopening of all non-essential stores in England and the mandatory use of face coverings on public transport. Pubs, restaurants, hotels and hairdressers reopened on 4 July and beauty salons reopened on 13 July. The use of face coverings in shops and supermarkets became mandatory on 24 July.

On 21 September, the alert level was moved from 3 to 4, which means transmission is high or rising exponentially. New restrictions took effect from 24 September, including a 10pm curfew on pubs, restaurants and bars in England. On 23 September, the government announced that all shop staff must wear face coverings and people were advised to work from home if possible. On 30 September, lockdown measures were tightened across the North East of England. On 14 October, the COVID-19 tier regulations came into force, replacing the existing lockdown regulations, defining three levels of restrictions to be applied as necessary in local areas.

On 31 October, the prime minister announced the decision to impose another stay-at-home order in England, initially from 5 November until 2 December, which will again see non-essential stores close, impacting on footfall and sales in the lead up to Christmas. Later, it was announced that the government’s Job Retention Scheme would be extended until March 2021, after it was due to end at the end of October. Wales and Northern Ireland have implemented their own restrictions including a limited-period “circuit breaker”, while Scotland has created a different tier system with different regulations at each level.

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, however, means there is wide variation on the range of forecasts, which 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.

Products covered in this Report

Since January 2017, Mintel has conducted brand research on over 120 retailers for inclusion across Mintel’s stream of retail Reports. As well as consumers’ attitudes towards retailers, we investigate how many people have used those retailers, how positive their experience of the retailer was and whether they would recommend that retailer.

Research is run at a brand level, rather than based on a particular product. So rather than asking specifically about people’s perception of Tesco’s food offering or Amazon’s range of electrical products, for example, we ask about their overall perception of the Tesco and Amazon brands.

Data in this Report is drawn from fieldwork conducted between October 2017 and July 2020. Many brands have been covered on multiple occasions and, unless otherwise stated, Mintel’s data refers to the most recent wave of research in which a given brand featured. Please refer to the Report Appendix for details of the Reports from which the brand data has been taken.

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