COVID-19 has caused shoppers to change habits; prior to the pandemic nearly half (48%) of all shoppers used a reusable cup when purchasing drinks outside, however, since COVID-19 this has fallen back with just 37% of people doing so.

Hygiene concerns have undoubtedly played a part in the setback of sustainable habits such as abandonment of reusables, with 35% of people uncomfortable handling products in-store. Additionally, more people are now shopping online, a process that involves excess packaging and a larger carbon footprint with deliveries and returns.

Younger shoppers appear to be less concerned about environmental issues than the older generation – 27% of Generation Z and Millennials are worried about excess waste that ends up in landfill compared with 44% of Baby Boomers. Complacency is a threat to ethical retailing as shopping ethically often comes with a higher price tag. It is important that consumers see the value in ethical and sustainable policies and will therefore be willing to pay more to take on more ethical shopping habits.

There remain, however, many opportunities. Many retailers are moving on from a purely sustainable focus to various other ethical initiatives. The last year has highlighted the need for retailers and brands to become more diverse and in 2021 retailers including Travis Perkins and Lululemon upped their diversity efforts by educating staff about LGBTQIA+ rights and promoting body positivity. With so many more people now concerned about their communities and the treatment of people, retailers will need to showcase what they are doing to improve equality.

The impact of COVID-19 on ethical retailing.

Key ethical concerns for consumers.

Importance of shopping ethically across categories.

Awareness surrounding ethical certification of products and brands.

The first COVID-19 cases were confirmed in the UK at the end of January 2020, with a small number of cases in February. Rapidly rising case numbers led to the first national lockdown, starting on 23 March. It wasn't until 15 June that non-essential stores were allowed to reopen, followed by pubs, restaurants, hotels and hairdressers on 4 July and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave, and social distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a month-long lockdown from 5 November and Scotland introducing a new five-level system of coronavirus restrictions.

Despite these restrictions, however, case numbers continued to increase. All four UK nations tightened restrictions further in January 2021, effectively leading to a full UK-wide lockdown.

On 22 February, Boris Johnson announced the roadmap to an easing of restrictions in England, starting with the reopening of schools on 8 March, followed by easing of restrictions on outdoor gatherings on 29 March, and with a hoped end to all restrictions by 21 June, although the growth of the Delta variant means this final lifting of restrictions was delayed. The Welsh and Scottish governments also gave more details on their plans to ease restrictions, with both nations taking a slightly more cautious approach to the one planned for England.

Even before the full re-opening of the economy, retail sales and Mintel’s own household finances tracker provided encouraging signs of a rapid return to consumer confidence, and a willingness to spend at least some of the savings that many households were able to build up over lockdown period.

The UK’s vaccination programme started on 8 December 2020. As of 23 August, nearly 87% of the UK population had received their first dose of the vaccine and more than 75% had received their second dose.

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its March 2021 Economic and Fiscal Outlook Report, but also take into account predictions made by other economic forecasts, including the Bank of England.

After the fall of 9.9% over the course of 2020, the OBR’s scenario suggests that UK GDP will grow by 4% in 2021 and 7.3% in 2022. GDP isn’t expected to return to pre-COVID-19 levels until the second quarter of 2022, although this is six months earlier than the OBR forecast in November 2020, mainly because of the faster than expected rollout of vaccines.

Unemployment is expected to peak at 6.5% in the fourth quarter of 2021. As with GDP, this is more positive than the OBR’s November forecast, but the OBR does raise the prospect of long-term scarring on employment, especially in the more exposed retail and hospitality sectors.

The rapid vaccine rollout and the continued efficacy of the vaccine, however, means that more recent economic forecasts have been significantly more optimistic than the OBR’s March forecast, even given the rise of the Delta variant. We have factored this rise in optimism into our market analysis and scenario forecasts.

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