Table of Contents
Executive Summary
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- Impact of COVID-19 on electrical goods retailing
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- Figure 1: Short-, medium- and long-term impact of COVID-19 on electrical goods retailing, 1 March 2021
- The market
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- Figure 2: Consumer spending on all electrical products: market size and forecast (including VAT) [prepared 28 February 2021], 2015-25
- Specialist sales hit as online pure players grow market share
- Companies and brands
- Amazon leapfrogs Dixons Carphone as leading electrical goods retailer
- 20% year-on-year increase in online electrical sales in 2020
- The consumer
- Four out of five consumers made a purchase in the past year
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- Figure 3: Types of electrical products purchased in the past 12 months, November 2020
- A year of unprecedented growth online
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- Figure 4: Channels of purchase, November 2020
- Consumers still turn to the security of computers when purchasing online
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- Figure 5: Channels of purchase, November 2020
- Mobile websites remain paramount in purchasing
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- Figure 6: Means of mobile purchasing, November 2020
- Pure players extend their lead online
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- Figure 7: Retailers used online, November 2020
- Supermarkets come to the fore on the high street, as department stores stutter
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- Figure 8: Retailers used in-store, November 2020
- Electricals again top Black Friday purchases
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- Figure 9: Black Friday purchases, December 2020
- COVID-19 has seen a fundamental shift in shopping behaviours
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- Figure 10: Changes in shopping behaviour, 19 February-1 March 2021
- Extended periods inside opens a wealth of new demand
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- Figure 11: Purchasing behaviours since the outbreak, November 2020
Issues and Insights
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- The short-term impact from COVID-19
- Opportunities from polarised demand
- The long-term impact from COVID-19
- Ensuring the appeal of multichannel moving forward
The Market – Key Takeaways
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- COVID-19 disruption sees sales drop by 7%...
- …despite a wealth of new consumer opportunities
- Ongoing polarisation of demand
- Specialist sales hit as online pure players grow market share
Market Size and Forecast
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- Sales fall despite new consumer opportunities
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- Figure 12: Short-, medium- and long-term impact of COVID-19 on electrical goods retailing, 1 March 2021
- COVID-19 disruption sees sales drop by 7%
- Spending falls sharply in initial lockdown
- New opportunities amid extended periods inside
- A polarisation of demand
- Before recovering from 2022 onwards
- Ongoing polarisation
- The net-long-term benefit for online will advantage pure players
- Continued COVID disruption
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- Figure 13: Consumer spending on all electrical products: market size and forecast (including VAT) [prepared 28 February 2021], 2015-25
- Figure 14: Consumer spending on all electrical products: market size and forecast (including VAT), current and constant prices, 2015-25
- Segment forecasts
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- Figure 15: Core electrical goods segments as a % of the total market, 2015-20
- Figure 16: Total spending on core electrical goods segments, 2014-20
- Market drivers and assumptions
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- Figure 17: Key drivers affecting Mintel’s market forecast (prepared 15 December 2020), 2015-25
- Learnings from the last recession
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- Figure 18: Consumer spending on the home, 2007-12
Market Drivers
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- The impact of the 2021 lockdown
- Household appliance sales recover momentum but computing remains in the red…
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- Figure 19: Annual % change in all retail sales, electrical household appliance specialists and computers & telecoms equipment specialists, non-seasonally adjusted value series, January 2019-January 2021
- …which is largely mirrored in volume sales
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- Figure 20: Annual % change in all retail sales, electrical household appliance specialists and computers & telecoms equipment specialists, non-seasonally adjusted volume series, January 2019-January 2021
- Largely stable inflation eases potential disruption
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- Figure 21: Price inflation: annual % rate of change in core electrical categories, by month, May 2020- January 2021
- House moves fall by 56.8% in April 2020…
- …before picking up sharply
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- Figure 22: Number of residential property transactions with a value of £40,000 completed in the UK, January 2019-January 2021
- Home-cooking and baking surges with restrictions
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- Figure 23: Changes to home-cooking, 26 March-16 April 2020
- Uptake of credit falls amid uncertainty
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- Figure 24: Monthly consumer credit, excluding student loans, January 2018-December 2020
- Christmas sales
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- Figure 25: What consumers give as Christmas gifts, 2018-20
Specialist Sector Size
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- Specialist market share hit by disruption
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- Figure 26: Electrical goods specialists’ sector sales (including VAT), 2016-20
- Figure 27: Electrical goods specialists’ sector sales (including and excluding VAT), 2016-21
- Store numbers fall in 2020 with closures
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- Figure 28: Electrical specialists’ number of retail outlets, 2015-20
Channels of Distribution
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- Online-only sees sharp gains due to the redirection of demand
- Supermarkets come to the fore
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- Figure 29: Estimated distribution of spending on electrical goods, 2019 and 2020
Companies and Brands – Key Takeaways
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- Slumping mobile-phone revenues hold back specialist leader Dixons Carphone
- Significant uptick in online-only non-specialists’ electrical revenue
- Amazon leapfrogs Dixons Carphone as the leading electrical goods retailer
- 20% year-on-year increase in online electrical sales in 2020
- Amazon outperforms all others when it comes to usage and customer experience
- Livestream shopping and drive-thru click-and-collect to combat impact of COVID-19 disruption
- Retail advertisers of electrical product adspend dives 15.1%
Leading Specialists
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- Slumping mobile-phone sales hold back Dixons Carphone performance
- Services and wearables boost Apple Retail revenue growth
- AO UK sales driven by more consumers shopping online during lockdown and expanded product offering
- Euronics UK (C.I.H) optimistic about future sales
- Repair and refurbishing acquisition helps drive Buy It Direct revenue growth
- Falling store sales hit Hughes Electrical revenue
- BrightHouse call in administrators
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- Figure 30: Leading specialist retailers of electrical goods net revenues, 2015/16-2019/20
- Revenue growth momentum with online specialists
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- Figure 31: Leading specialist retailers of electrical goods, CAGR of net revenues, 2015/16-2019/20
- Falling sales and diminishing footfall force store closures
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- Figure 32: Leading specialist retailers of electrical goods, outlets, 2015/16-2019/20
- Store-based sales expected to be hit hard by COVID-19 restrictions
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- Figure 33: Leading specialist retailers of electrical goods, estimated sales per outlet, 2015/16-2019/20
- Pressure on prices and infrastructure investment drag down Dixons Carphone and Ebuyer profitability
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- Figure 34: Leading specialist retailers of electrical goods, operating profits, 2015/16-2019/20
- Cost savings and revised pricing bolster Hughes Electrical and AO UK operating margin
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- Figure 35: Leading specialist retailers of electrical goods, operating margins, 2015/16-2019/20
Leading Non-Specialists
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- Significant uptick in online-only retailers’ electrical revenue
- Boost in gaming console sales benefit Game Digital
- Digital sales drive supermarket and department-store electrical revenue during COVID-19 crisis
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- Figure 36: Leading non-specialist retailers’ estimated sales of electronic goods (excluding VAT), 2016-20
- Predominantly store-based non-specialist electrical revenue growth lag online-only retailers
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- Figure 37: Leading non-specialist retailers of electrical goods, estimated CAGR of net revenues, 2016-20
- Figure 38: Estimated Amazon and eBay total GTV/GMV electrical sales, 2016-20
- Scaling back store presence
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- Figure 39: Leading non-specialist retailers of electrical goods, outlet numbers, 2016-20
Market Share
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- Amazon and AO UK the biggest gainers in COVID-19 pandemic-driven market
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- Figure 40: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2020
- Figure 41: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2018-20
Mobile-Phone Specialists
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- The market
- Network providers rethinking role of stores as sales migrate online
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- Figure 42: Estimated store numbers of the Big Four network providers, 2020
- Falling service revenue drags on network providers’ performance
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- Figure 43: Leading network providers, financials, 2016-19
- Carphone Warehouse sales slump
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- Figure 44: Dixons Carphone financial results, by trading segment, 2017/18-2019/20
Online
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- COVID-19 pandemic accelerates online share of electrical goods sales to nearly 74%
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- Figure 45: Estimated online sales of electrical goods (including VAT), 2016-20
- Online the dominant sales channel
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- Figure 46: Channels of purchase, November 2020
- Amazon near-40% of all online electrical sales
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- Figure 47: Leading online retailers’ estimated share of online spending on electrical goods, 2020
Launch Activity and Innovation
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- Comet relaunches as an online-only brand
- Chinese ecommerce giant considering UK store launch
- Online electrical specialist AO launch physical stores
- Sky launches its first ever bricks-and-mortar retail shop
- Livestream electricals shopping
- Giving unwanted devices a second life
- Currys PC World’s ‘Go Greener’ tech initiative
- Zero-contact one-hour drive-thru click-and-collect service
- Pop-up retro video game store
Advertising and Marketing Activity
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- Total sector adspend falls 15.1% year on year in 2020
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- Figure 48: Total recorded above-the-line, online display and direct mail advertising expenditure by UK retail advertisers of electrical products, 2016-20
- DSG Retail is the sector’s biggest advertising spender for a fifth consecutive year
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- Figure 49: Leading UK retail advertisers of electrical products: total recorded above-the-line, online display and direct mail advertising expenditure, 2016-20
- Sector adspend highest around Black Friday and Cyber Monday
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- Figure 50: Total recorded above-the-line, online display and direct mail advertising expenditure by UK retail advertisers of electrical products, by month, 2019-20
- TV accounts for the biggest share of sector advertising spend
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- Figure 51: Total recorded above-the-line, online display and direct mail advertising expenditure by UK retail advertisers of electrical products, by media type, 2016-20
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 52: Attitudes towards and usage of selected brands, December 2020
- Key brand metrics
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- Figure 53: Key metrics for selected brands, December 2020
- Brand attitudes: Amazon and AO provide a great online service
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- Figure 54: Attitudes, by brand, December 2020
- Brand personality: Currys PC World ethically minded, Argos accessible
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- Figure 55: Brand personality – macro image, December 2020
- John Lewis stylish
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- Figure 56: Brand personality – micro image, December 2020
- Brand analysis
- Amazon: an excellent customer experience and recommended by those that have used it
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- Figure 57: User profile of Amazon, December 2020
- Apple Store innovative and a brand worth paying more for
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- Figure 58: User profile of Apple Store, December 2020
- John Lewis & Partners trustworthy and reliable, but lacks excitement
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- Figure 59: User profile of John Lewis & Partners, December 2020
- AO.com untrustworthy and not a retailer worth paying more for
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- Figure 60: User profile of AO.com, December 2020
- Argos good value for money and accessible
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- Figure 61: User profile of Argos, December 2020
- Currys PC World authoritative and ethically minded but an unenjoyable experience
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- Figure 62: User profile of Currys PC World, December 2020
The Consumer – Key Takeaways
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- The surge in flexible living opens a wealth of new demand
- But demand has polarised
- A year of unprecedented growth online
- Strengthening online pure players but also raising questions over multichannel
- The need for more engagement via mobile apps
Impact of COVID-19 on Consumer Behaviour
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- Anxiety eases off slightly following third lockdown spike
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- Figure 63: Extremely worried about exposure to COVID-19/coronavirus, 8 December 2020-1 March 2021
- A fundamental change in shopping behaviours
- Older consumers lead the shift in behaviour
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- Figure 64: Changes in shopping behaviour, by age, 19 February-1 March 2021
- The sector could be buoyed by redirected spending
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- Figure 65: Spending, by sector, 19 February-1 March 2021
Electricals Purchased
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- Four out of five consumers made a purchase in the past year
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- Figure 66: Electrical products purchased in the past 12 months, November 2017-20
- Phones still lead the way despite decline
- Extended periods inside underpin new growth
- The focus on wellbeing moves within the home
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- Figure 67: Types of electrical products purchased in the past 12 months, November 2017-20
- Older shoppers turn to appliances
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- Figure 68: Types of electrical products purchased in the past 12 months, by age and socio-economic group, November 2020
In-Store vs Online
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- A year of unprecedented growth online
- But decline on the high street raises questions of the future of stores
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- Figure 69: Channels of purchase, November 2020
- Online dominates in every product category
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- Figure 70: Purchases by channels of purchase, November 2020
Channel of Purchase Online
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- Consumers still turn to the security of computers
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- Figure 71: Channels of purchase, November 2020
- Older shoppers look to the security of computers online…
- …while younger shoppers are happy using smaller devices
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- Figure 72: Channels of purchase, by age, November 2020
The Continued Rise in Mobile Purchasing
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- Mobile purchasing varies by price
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- Figure 73: Purchases by channels of purchase, November 2020
- Mobile websites remain paramount
- One third bought via mobile apps
- But this was hit by disruption in the past year
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- Figure 74: Means of mobile purchasing, November 2020
- But retailers must boost engagement with apps
- Attracting new customers
- ... and re-engaging lost ones
- Younger consumers spearhead app use
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- Figure 75: Means of mobile purchasing, by age, November 2020
- A renewed opportunity for social media
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- Figure 76: Sources of inspiration/alternative purchasing platforms, April 2020
- The pivot from influence to direct consumers…
- …could see social-media companies become major players in the market
Retailers Used Online
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- Pure players extend their lead
- But specialists continue to offer an important alternative
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- Figure 77: Retailers used online net, November 2020
- Amazon’s dominance grows
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- Figure 78: Retailers used online, November 2020
Retailers Used In-Store
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- Supermarkets come to the fore…
- …as department stores stutter
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- Figure 79: Retailers used in-store net, November 2020
- Currys PC World remains king of bricks and mortar
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- Figure 80: Retailers used in-store, November 2020
- How to ensure the continued relevance of the store post-disruption
- First-person advice
- Serving newer areas of interest
- Online shoppers migrate across retailers
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- Figure 81: Repertoire analysis of retailers used in-store net, November 2020
Black Friday
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- Two fifths made a purchase during promotions
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- Figure 82: Black Friday methods of purchase, December 2020
- Electricals topped total purchases
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- Figure 83: Black Friday purchases, December 2019 and December 2020
- But promotions continue to displace demand
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- Figure 84: Attitudes towards Black Friday 2020, December 2020
COVID-19 and Electrical Goods Retailing
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- Two thirds have made a purchase since the outbreak
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- Figure 85: Purchasing since the outbreak, November 2020
- Extended periods inside opens a wealth of new demand
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- Figure 86: Purchasing behaviours since the outbreak, November 2020
- Technological innovation remains limited to younger buyers
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- Figure 87: Purchasing behaviours since the outbreak, November 2020
- Purchasing behaviours reveal the polarisation of demand
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- Figure 88: Purchasing behaviours since the outbreak, by socio-economic band, November 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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- Figure 89: UK value of spending on electrical products: best- and worst-case forecasts [prepared 28 February 2021], 2015-25
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