Table of Contents
Executive Summary
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- Impact of COVID-19 on the retail sector
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- Figure 1: Impact of COVID-19 on the UK retail market, in short, medium and long-term, 12 April 2021
- The market
- Market size and forecast
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- Figure 2: UK forecast for all retail sales (excluding fuel), at current prices, 2015-25
- Grocery and online-only retailers benefit; non-food stores suffer in pandemic conditions
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- Figure 3: Share of total spending in the retail sector (excluding fuel), by major category, 2010-20
- Online leant on like never below…
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- Figure 4: All online retail sales, average weekly sales, non-seasonally adjusted, Jan 2020-Mar 2021
- …sending in-store sales to record lows
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- Figure 5: Estimated growth/decline in in-store sales, by major category, Jan 2019 – Feb 2021
- Online sales will re-balance, but the pandemic will leave a legacy of higher penetration
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- Figure 6: UK forecast for all online retail sales, at current prices, 2015-25
- Grocery has a record-breaking year as consumption shifts to in-home
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- Figure 7: UK forecast for all grocery retail sales, at current prices, 2015-25
- Non-food stores pay the price for store closures
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- Figure 8: UK forecast for all non-food store-based retail sales, at current prices, 2015-25
- The consumer
- Concern levels, while remaining high, are easing
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- Figure 9: Mintel COVID-19 exposure anxiety and lifestyle impact index, 28 February 2020-12 March 2021
- Financial wellbeing has hit new heights despite the crisis…
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- Figure 10: The financial wellbeing index, January 2015- March 2021
- …but many still feel worse off than a year ago
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- Figure 11: Changes in household finances, January 2015- March 2021
- In-home becomes the focus of spending in 2020
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- Figure 12: Average changes in spending compared to pre-pandemic levels, Dec 2020-Apr 2021
- A quarter expect to work from home more as a result of the pandemic
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- Figure 13: Post-pandemic lifestyle intentions, February 2021
- Online and localism defining shopping behaviours
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- Figure 14: Impact of COVID-19 on shopping behaviour, February 2020
- A quarter plan to continue shopping more locally
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- Figure 15: Post-peak pandemic shopping intentions, February 2021
- Even as the pandemic eases, reassuring shoppers in-store will be critical
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- Figure 16: COVID-19 measures post-pandemic, February 2021
- Over half of consumers have missed a day out shopping
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- Figure 17: COVID-19 shopping behaviours, February 2021
Category Winners and Losers
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- Winner: online retailing
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- Figure 18: All online retail sales, split by broad category of retailer, Jan 2016 – Feb 2021
- Loser: in-store trade
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- Figure 19: Estimated growth/decline in in-store sales, by major category, Jan 2019 – Feb 2021
- Winner: localised trade and independent retailers
- Loser: inner city trade
- Winner: home and grocery
- Loser: fashion
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- Figure 20: retail sales, performance by category during 2020 and 2020 and 2021 lockdowns
- Winner: digital service and payments
- Loser: in-store service and other USPs
How the Pandemic Unfolded
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- Phase 1 – January-March: Consumers go into lockdown
- Phase 2 – March-June: Adapting to life in lockdown
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- Figure 21: Recorded daily number of confirmed cases of COVID-19 and deaths registered as relating to the virus, 31 December-5 November 2020
- Phase 3: Emerging from the initial lockdown
- Phase 4: Rise of the next wave
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- Figure 22: Recorded daily number of confirmed cases of COVID-19, 30 January 2020-28 March 2021
- Phase 5: January-March – Winter lockdown and vaccine rollout
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- Figure 23: Cumulative number of first and second vaccines delivered in the UK, 10 January-31 March 2021
- Phase 6: March onwards – The Roadmap out of lockdown
The Post-Pandemic Outlook for Retail
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- Online penetration of sales to be given long-term boost by COVID-19
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- Figure 24: Forecast online sales as a percentage of all retail sales, pre and post-pandemic, 2015-25
- A greater focus on online by store-based retailers will make the market more competitive, and crowded
- Footfall will be slow to recover
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- Figure 25: Google COVID-19 Community Mobility Reports, UK (national), average monthly change, 15 Feb 2020 - 30 Apr 2021
- The impact of more working from home
- A need for new blood on the high street
- For many customers it will get worse before it gets better
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- Figure 26: Impact of COVID-19 on personal income, February 2021
- ‘Conscious consumerism’ still critical
The Economic Impact of COVID-19
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- A record drop in economic activity…
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- Figure 27: Annual percentage change in GDP, 2007-25 (forecast)
- …as COVID-19 restrictions caused a severe fall in spending
- Consumer spending is heavily dependent on the path of the pandemic
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- Figure 28: household consumption index, 2019-25 (scenario forecasts)
- Furloughs have saved millions of jobs…
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- Figure 29: Number of employments furloughed, time series, March 2020-February 2021
- …but unemployment is forecast to rise when state support ends
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- Figure 30: Quarterly unemployment rate, Q1 2008-Q1 2026 (forecast)
- Under-25s have taken the brunt of COVID-19 job losses
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- Figure 31: Change in number of employees on payroll, by age, February 2021 vs February 2020
Retail Sales Performance
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- Impact of COVID-19 on retail and e-commerce
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- Figure 32: Impact of COVID-19 on the retail sector, in short, medium and long term, 12 April 2020
- Non-essential store closures hit sales hard
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- Figure 33: Percentage change in retail sales, non-seasonally adjusted, by major category, Jan 2020-Mar 2021
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- Figure 34: Percentage change in key non-food store-based retail sales, non-seasonally adjusted, Mar 2020-Mar 2021
- Figure 35: retail sales, performance by category during 2020 and 2020 and 2021 lockdowns
- Online demand soars in pandemic conditions
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- Figure 36: All online retail sales, average weekly sales, non-seasonally adjusted, Jan 2020-Mar 2021
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- Figure 37: All online sales as a percentage of all retail sales, by store-based grocery and non-food retailers, Jan 2020 – Feb 2021
- Physical stores pressurised like never before, something which will have a significant legacy impact
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- Figure 38: Estimated growth/decline in in-store sales, by major category, Jan 2019 – Feb 2021
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- Figure 39: Estimated share of all non-food sales, by stores and non-store trade, Jan 2019 – Feb 2021
All Retail Sales Forecast
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- Figure 40: Share of total spending in the retail sector (excluding fuel), by major category, 2010-20
- All retail sales advance, even in the conditions of the pandemic
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- Figure 41: UK forecast for all retail sales (excluding fuel), at current prices, 2015-25
- Need for value will depress sales in the shorter term, but growth forecast through to 2025
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- Figure 42: UK forecast for all retail sales (excluding fuel), at current and constant prices, 2015-25
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All Retail Sales: COVID-19 Scenario Performance
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- Mintel’s approach to predicting the impact of COVID-19
- Fundamental differences in how COVID-19 is affecting consumer markets
- The risk of vaccine-resistant strains of COVID-19 adds huge uncertainty
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- Figure 43: COVID-19 scenario forecasts, all retail sales, 2015-25
- Extended COVID-19 disruption would limit spending
- COVID-19 market disruption: risks and outcomes
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- Figure 44: Summary of Mintel scenario expectations and the impact on the retail market, March 2021
Grocery Market Forecast
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- Emergence of COVID-19 in 2020 will present tough comparatives for 2021
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- Figure 45: Growth in key food and drink retail categories, non-seasonally adjusted, 2020
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- Figure 46: UK forecast for all grocery retail sales, at current prices, 2015-25
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- Figure 47: UK forecast for all grocery retail sales, at current prices and constant prices, 2015-25
- Further COVID-19 disruption would heighten grocery demand
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- Figure 48: COVID-19 scenario forecasts, all grocery sales, 2015-25
- COVID-19 to mark a step-change in online grocery engagement
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- Figure 49: All online grocery sales as a proportion of all grocery retail sales, pre-and post-COVID-19, 2015-25
Non-food Market Forecast
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- Almost all non-food stores suffer as a result of COVID-19
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- Figure 50: Non-food stores: growth, non-seasonally adjusted, and proportion of total non-food store sales, 2019-20
- COVID-19 legacy will take multiple years for the non-food sector to recover from
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- Figure 51: UK forecast for all non-food store-based retail sales, at current prices, 2015-25
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- Figure 52: UK forecast for all non-food store sales, at current prices and constant prices, 2015-25
- Further COVID-19 disruption would spell disaster for the non-food sector
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- Figure 53: COVID-19 scenario forecasts, all non-food store sales, 2015-25
Fashion Market Forecast
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- Fashion hit hardest by the pandemic
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- Figure 54: Value of consumer spending on clothing and footwear and change in market value, 2015-20
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- Figure 55: Mintel Fashion Tracker: Fashion items purchased in the last three months, 2019- Apr 2021
- Dramatic withdrawing of demand too much for some leading players
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- Figure 56: UK forecast for all fashion store-based retail sales, at current prices, 2015-25
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- Figure 57: UK forecast for all store-based fashion retail sales, at current prices and constant prices, 2015-2025
- Fashion would be hit hardest by further disruption
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- Figure 58: COVID-19 scenario forecasts, all fashion store-based retail sales, 2015-25
Household Goods Forecast
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- ‘In and around home’ becomes the focus of spending in 2020
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- Figure 59: Consumer spending, annual and half-year percentage change growth, non-seasonally adjusted, by major category, 2020
- Leading household specialists benefit from the in-home trend
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- Figure 60: Core household goods stores sub-categories, retail sales performance, non-seasonally adjusted, Mar 2020 -Feb 2021
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- Figure 61: UK forecast for all household goods stores sales, at current prices, 2015-25
- Figure 62: UK forecast for all household goods stores retail sales, at current prices and constant prices, 2015-2025
- Longer-term disruption would limit further release of spending
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- Figure 63: COVID-19 scenario forecasts, all household goods stores retail sales, 2015-25
Online Market Forecast
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- COVID-19 pandemic to lead to accelerated growth within the online channel
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- Figure 64: UK forecast for all online retail sales, at current prices, 2015-25
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- Figure 65: UK forecast for all online retail sales, at current prices, 2015-25
- Reliance on online to serve customers will alter future strategy
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- Figure 66: All online retail sales, split by broad category of retailer, Jan 2016 – Feb 2021
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- Figure 67: Online as a percentage of retail sector, by major store-based category, 2018-20
- Additional COVID-19 disruption would see more demand served online
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- Figure 68: COVID-19 scenario forecasts, all online retail sales, 2015-25
Consumer Concerns over the Impact on Health
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- Exposure anxieties align with case numbers
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- Figure 69: Mintel COVID-19 exposure anxiety and lifestyle impact index, 28 February 2020-12 March 2021
- Exposure anxiety typically higher among over-55s
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- Figure 70: Proportion of adults indicating higher levels of anxiety (‘4’ or ‘5’) towards being exposed to the coronavirus, by age 28 February 2020-12 March 2021
- Middle-age band fear transmitting virus
Consumer Concerns Over the Impact on Lifestyles Lifestyle
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- Concerns about lifestyles impact outweigh exposure fears
- Consumers react to unprecedented lifestyle restrictions
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- Figure 71: Mintel COVID-19 exposure anxiety and lifestyle impact index, 28 February 2020-12 March 2021
- Lifestyle impact concerns high across all age groups
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- Figure 72: Proportion of adults indicating higher levels of anxiety (‘4’ or ‘5’) about how the outbreak could impact their lifestyle, by age 28 February 2020-26 March 2021
Impact on Household Finances
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- Financial wellbeing has hit new heights despite the crisis…
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- Figure 73: The financial wellbeing index, January 2015- March 2021
- …but many still feel worse off than a year ago
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- Figure 74: Changes in household finances, January 2015- March 2021
- One in six have been furloughed at least once
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- Figure 75: Impact of COVID-19 on employment and working patterns, February 2021
- Income trends point to a two-track crisis and recovery
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- Figure 76: Impact of COVID-19 on personal income, February 2021
- Cuts to discretionary spending have kept household finances afloat…
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- Figure 77: Impact of COVID-19 on household debts, February 2021
- …and led to a record savings boost
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- Figure 78: Impact of COVID-19 on the value of savings in different products, February 2021
- Most are optimistic about the year ahead…
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- Figure 79: The financial confidence index, January 2015-March 2021
- …and looking forward to getting back to experiences
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- Figure 80: Financial priorities when COVID-19 is no longer a concern, February 2021
How the Pandemic Changed Consumer Behaviour
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- In-home becomes the focus of spending
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- Figure 81: Average changes in spending compared to pre-pandemic levels, Dec 2020-Apr 2021
- Health and fitness gets a boost from the pandemic
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- Figure 82: COVID-19 Tracker: Priority shifts in the pandemic, 4-12 February 2021
- Greater willing to re-engage following 2021 lockdown
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- Figure 83: COVID-19 Tracker: what consumers are looking forward to post-lockdown, May 2020 and April 2021
- Uncertainty regarding holidays leaves an opportunity for retail
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- Figure 84: COVID-19 Tracker: Holiday intentions in 2021, 4-12 March 2021
- Longer-term shifts in working habits bring opportunity and pressure for retail
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- Figure 85: Post-pandemic lifestyle intentions, February 2021
How the Pandemic Changed Shopping Behaviour
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- Nearly half have shopped more online as a result of the pandemic
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- Figure 86: Impact of COVID-19 on shopping behaviour, February 2021
- Concern in visiting stores directly tied to overall concern
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- Figure 87: COVID-19 Tracker: Impact on online shopping and time spent in-store, Apr 2020 – Apr 2021
- Concerns and regulation take away some USPs of stores
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- Figure 88: Comfort levels with retail based activities, 25 Jun-1 Jul 2020 (W16) and 24 Sep-1 Oct 2020 (W29)
- Pandemic creates a ‘prepared’ shopper mentality
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- Figure 89: COVID-19 Tracker: Impact on availability and ‘stocking up’, Apr 2020 – Apr 2021
Online Shopping Intentions Post-Pandemic
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- A quarter expect to do more online shopping moving forward as a result of the pandemic
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- Figure 90: Online shopping behaviour intentions post-peak of the COVID-19 pandemic, February 2021
- Over a third of over-65s have done more online shopping as a result of the pandemic
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- Figure 91: Changes and expected changes in online shopping usage, by age, February 2021
- Pandemic to lift social platforms to a new level in the retail sector
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- Figure 92: Changes and expected changes in online shopping via social media usage, by age, February 2021
- Click-and-collect will play a critical role in making pandemic levels sustainable long term
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- Figure 93: Changes and expected changes in click-and-collect usage, by area lived in, February 2021
The Legacy of Localised Purchasing
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- Local shopping rises as customers stick close to home
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- Figure 94: Impact and expected legacy of COVID-19 on physical location shopped in, February 2021
- Concern will continue to play into localism…
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- Figure 95: Intentions to shop locally, by concern level regarding the risks of COVID-19, February 2021
- …as will long-term shifts in working life
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- Figure 96: Intentions to shop locally/outside of local area, by expecting working from home level, February 2021
- Younger consumers driving, and will drive, support for independents
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- Figure 97: Smaller/independent retail shopping behaviours during and intentions post- pandemic, February 2021
Impact and Legacy of COVID-19 on Digital Forms of Service
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- Almost half of consumers have used technology to view/try products in-home
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- Figure 98: Impact and expected legacy of COVID-19 on digital forms of service, February 2021
- Younger consumers driving use of digital services and tools…
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- Figure 99: Impact of COVID-19 on digital forms of service, by age, February 2021
- … and they will be the group which drives usage moving forward
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- Figure 100: Future intentions towards digital forms of service, by age, February 2021
Impact and Legacy of COVID-19 on Footfall
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- Strong desire to get back on the high street…
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- Figure 101: Attitudes towards shopping as part of a day out, by age, February 2021
- …however it will be a slow build to pre-pandemic levels…
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- Figure 102: COVID-19 Tracker: Activities done as restrictions eased, 16-22 April 2021
- …and will require the full feature set of the high street
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- Figure 103: Attitudes towards other physical businesses and shopping, by age, February 2021
- Crucial that stores get back to full functionality
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- Figure 104: Attitudes towards trying/testing products in-store during the pandemic, by age, February 2021
Impact and Legacy of COVID-19 Safety Measures
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- COVID-19 measures create a mixed response from in-store shoppers
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- Figure 105: Attitudes towards COVID-19 safety measures, February 2021
- Over half want mask wearing to remain even when the outbreak eases
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- Figure 106: Measures shoppers would like to see remain as the outbreak eases, February 2021
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- Figure 107: Measures shoppers would like to see remain as the outbreak eases, by concern level regarding exposure to COVID-19, February 2021
- Pandemic measures highlight some opportunities
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- Figure 108: Measures shoppers would like to see remain as the outbreak eases, by age, February 2021
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Market size data
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- Figure 109: Retail sales classifications, by SIC code, 2021
- Abbreviations
- Consumer research methodology
- Market drivers and assumptions
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- Figure 110: Key drivers affecting Mintel’s market forecast, 2020-24 (prepared 12 March 2021)
- Forecast methodology
Appendix – Central Forecast Methodology
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- All Retail Sales
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- Figure 111: Total retail sales, best and worst case forecast, 2020-25
- All grocery retail sales
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- Figure 112: All grocery retail sales, best and worst case forecast, 2020-25
- All non-food stores retail sales
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- Figure 113: All non-food stores retail sales, best and worst case forecast, 2020-25
- All non-store retail sales
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- Figure 114: All non-store retail sales, best and worst case forecast, 2020-25
- All online retail sales
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- Figure 115: All online retail sales, best and worst case forecast, 2020-25
- All fashion stores retail sales
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- Figure 116: All fashion stores retail sales, best and worst case forecast, 2020-25
- All household goods stores retail sales
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- Figure 117: All household goods stores retail sales, best and worst case forecast, 2020-25
Appendix: COVID Scenario Performance Methodology and Assumptions
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- Rapid COVID recovery, central and extended COVID disruption scenarios outline
- Scenario methodology
- Scenario performance
- Total retail sales
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- Figure 118: Total retail sales, scenario forecast, 2020-25
- All grocery retail sales
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- Figure 119: All grocery retail sales, scenario forecast, 2020-25
- All non-food stores retail sales
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- Figure 120: All non-food stores retail sales, scenario forecast, 2020-25
- All non-store retail sales
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- Figure 121: All non-store retail sales, scenario forecast, 2020-25
- All online retail sales
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- Figure 122: All online retail sales, scenario forecast, 2020-25
- All fashion stores retail sales
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- Figure 123: All fashion stores retail sales, scenario forecast, 2020-25
- All household goods retail sales
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- Figure 124: All household goods retail sales, scenario forecast, 2020-25
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