Nothing in the modern evolution of the industry has compared with the global disruption caused by the coronavirus (COVID-19) pandemic. Given that retailers sell across categories, the pandemic will negatively impact some more than others. The outlook is strongest for essential businesses, such as grocery retailers, and those with more well-equipped digital operations.
This report comes in PPT.
The pandemic has forced governments to quarantine entire countries, disrupted supply chains, slashed business and consumer confidence and affected financial markets. Euromonitor International’s baseline forecast for global real economic growth in 2020 is in the range of -1.5 to .5%.
The restrictions have led to the collapse of the travel industry, but the impact will not be as severe in retailing. Retailers sell across categories, meaning that the pandemic will negatively impact some channels more than others.
The Global Financial Crisis had a severe impact on consumer markets. The overall retail industry declined by 3% in 2009, but rebounded in 2010, with 6% growth. Past public health emergencies, like the SARS and MERS outbreaks, also provide clues as to how retailing may fair amid the crisis.
The uncertainty of COVID-19’s impact on the economy has prompted retailers to withdraw their earnings outlooks for the quarter and/or whole year. Some are exploring filing for bankruptcy to restructure debt and others are borrowing against their lines of credit to ensure proper cash flow.
Big consumer shifts are already under way as society evolves from a carefree world to one under lockdown. This phase is likely to lead to a permanent boost in ecommerce and contactless payments as well a potential divergence of the supply chain or a reimagined store pick-up.
Technology is here to stay. This crisis has underscored the important role that technology plays in how consumers live, work, shop and play. Some companies are already making acquisitions to boost their tech capabilities.
Sales of new and used goods to the general public for personal or household consumption. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts, fuel. Also excludes foodservice, rental and hire and wholesale industries (Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retailing is the aggregation of Store-based retailing and Non-store retailing. Retailing 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, ie retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer which 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 retailing. In relation to click and collect purchases (i.e. where purchases are made over the internet but picked up at store) where the sales data is attributed depends on where the payment is made: If payment is made in store, then the sale is included in store-based sales. If payment is made over the internet, then the sale is included in internet retailing.See All of Our Definitions
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