The retail industry globally faces significant challenges as a result of the combination of the Coronavirus (COVID-19) pandemic, low oil prices and existing economic problems. This report lays out Euromonitor’s phases of retail evolution due to COVID-19 and offers snapshots of how retail will be affected in each region. It will also consider the major trends emerging from these shifts, including the growth of e-commerce and role of digital intermediaries.
This report comes in PPT.
The COVID-19 pandemic will negatively impact the retail industry globally in 2020 and 2021. The pandemic required the temporary closure of many stores, weakened consumer demand and increased the costs for many retailers.
Beyond the direct effects of the pandemic itself, retailers in many emerging markets are contending with the negative effects of low oil prices on consumer spending. Low oil prices are due to several factors, but travel limitations imposed by governments are one drag on the demand for oil.
Consumers have increasingly turned to e-commerce during the pandemic, with the greatest gains in e-commerce penetration rates coming from markets that already had relatively high levels of e-commerce sales. South Korea and China in particular will record strong increases. E-commerce intermediaries, including marketplaces, delivery platforms, and social media and messaging services, play a particularly important role in e-commerce’s 2020 growth.
The trajectory of the pandemic will largely determine each market’s retail recovery, with markets with the lowest levels of cases generally showing the most rapid recoveries. Recovery is also likely to be uneven, with certain channels recovering much more rapidly than others. In general, specialist retailers and department stores face the longest recoveries.
Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.
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