British consumers are poised to splash the cash and spend billions this year after months of coronavirus lockdowns.
UK shoppers are expected to spend £408.5bn ($576bn) or £6,150 per head in 2021, according to new research from VoucherCodes.co.uk carried out by the Centre of Retail Research (CRR).
The Life after Covid: Prospects for retail, hospitality and travel report examines the effect of the crisis on retail in the UK since the first lockdown came into place in March 2020, and also looks ahead to how sales will recover during 2021 and 2022.
Retail spending is set to see a firm increase in both 2021 and 2022 across all areas in the country.
COVID-related shutdowns saw the retail industry take a large dip in 2020, with year on year (YoY) growth between 2019 and 2020 hit an all-time low of 0.3%. But, there is a light at the end of the tunnel for UK high streets. Retail sales are predicted to grow by an average of 3.5%, or £13.8bn in 2021, with shoppers expected to spend £6,150 per head this year on average.
The capital is expected to see the biggest boost in combined online and offline retail spending, with £76.2bn forecast for 2021, or £8,554 per head. Spending is also forecast to remain highest in London in 2022 at £80bn total sales and £8,982 per head on average.
Looking ahead, total UK retail sales are predicted to grow by a further 5% in 2022 — an increase of £20.4bn, giving a total expected retail spend of £429bn by that year. This equates to £6,458 being spent per head across the country in 2022.
Non-food sales are expected to contribute a large proportion of the predicted growth (£238.3bn) with an 8.8% increase on 2020’s spend (£218.9bn). Consumers are set to spend £19.4bn more on non-food items when compared to 2020 with fashion, cosmetics and the home and garden sectors set to see the biggest boosts.
Similarly as in 2021, non-food spend it set for another year of growth in 2022, but at a steadier pace of 6.6% YoY, resulting in a £15.6bn sales boost.
Retail sales figures out next week are expected to show further growth in the sector as non-essential shops have been open since 12 April.
UK retail sales have been rebounding since January's 8.2% decline after shops were shut amid England's third lockdown. They rose 2.2% in February and then a further 5.1% rise in March, primarily driven by people shopping in garden and DIY centres. April's figures were even better, rising 9.2%, driven by the reopening of non-essential shops on 12 April and consumer demand.
"The last year has been difficult for the retail industry with non-essential shops being closed for a large portion of 2020 and early 2021," said Anita Naik, lifestyle editor at VoucherCodes. "Despite online retail soaring as a result, the rapid changes in the ways people shopped during the pandemic has posed challenges for much of the retail industry."
She added: "Therefore, it’s encouraging to see such large growth predicted for both this year and next as consumers return to stores and continue to shop online from the comfort of their own homes. With life returning to a semblance of ‘normality’ it’s likely Brits will be spending more with retailers than they have been used to over the last year and it’s inevitable that there will be a shift in the things they are buying as life opens up again."
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