Retail is a sector that was already struggling to sustain itself before the COVID-19 pandemic put the breakers on almost every aspect of British life, including shopping.
For years, high streets across the UK have been pummelled by a perfect storm of more competitive online retailers, falling foot traffic, higher business rates and changing patterns of consumer behaviour.
Year-on-year, the number of store openings has been outpaced by closures, meaning that our high streets are literally shrinking with each passing year.
There are some success stories in amongst the decline though. Notably JD Sports, Primark, Boohoo, FootAsylum and our very own Greggs, all experienced strong growth in 2019.
But in general, 2019 was one of the worst years on record for the UK retail sector, with even Christmas shopping unable to make up for sluggish sales figures throughout the year.
Coming into 2020, a lot of retailers would have been hoping for a reprieve from financial hardship. It hasn’t quite worked out that way.
With the UK now in lockdown and only essential retailers allowed to trade, it is worth paying close attention to what happens in the months ahead to the economically important retail sector.
Headline figures from the latest CBI distributive trends survey paint quite an even picture for March. Retail sales were broadly flat year-on-year with a balance of -3 per cent, down from 1 per cent in February.
But this modest overall slowdown masks a very sharp divergence in sales between sectors.
For example, supermarkets experienced growth of 94 per cent in the year to March, while clothing stores suffered a fall of -75 per cent.
As consumers flooded into the supermarkets to stockpile essential household goods, social distancing measures kept them far away from the high street and the businesses who operate on them.
It is expected that as stockpiling and panic buying subsides, even increased demand for food, drink and household products won’t be able to stem a massive collapse in retail sales volumes across the board.
Current forecasts for retail sales in the year to April predict a -26 per cent decline in overall volumes, with retailers feeling more pessimistic than at any time since February 2009.
Ben Jones, CBI principal economist, said: “These are extraordinary times for the retail sector.
“Grocers are seeing a temporary increase in demand because of coronavirus. But many other retailers are seriously suffering as households put off non-essential purchases and social distancing keeps people away from the high street.
“The Government and Bank of England have already taken welcome, substantial steps to support businesses during this unprecedented period.
“What’s needed now is clarity over the support available to firms and fast action to ensure measures announced last week are accessible to businesses of all sizes.”
The speed at which the generous package of business support Chancellor Rishi Sunak announced last week becomes available to retailers is going to be crucial in safeguarding the whole industry, which as mentioned was not in a healthy position to begin with.
The sooner we can get the public health emergency under control and get the economy moving again the better, because the retail sector is hanging on for dear life.