A second national lockdown in England will compound the economic effects already being seen from regional lockdowns, as new research suggests consumers may spend £9 billion less than last year in the run-up to Christmas 2020.
The Centre for Retail Research had been forecasting a £1.3 billion increase in sales but, The Drum reports, it is now projecting an 11.6% decline of £9.6 billion for total consumer spending of £73.4 billion in the six weeks before Christmas.
During that period, the Centre expects almost half (49%) of sales to take place online.
Meanwhile, IMRG, the UK’s online retail association, is anticipating a “huge surge” in online shopping over Black Friday week – an uplift of between 35% and 45% on last year.
“The stores are closed, furlough has been extended and shoppers are being advised to get the bulk of their Christmas shopping done before December,” noted Andy Mulcahy, Strategy and Insight Director at IMRG.
“There is a possibility that could mean people buy more in the early weeks of November,” he added, “pulling some of the volume away from the Black Friday week – that seems the only realistic reason why the online spend for that period could come in lower than +35%.”
While online retail may be getting another boost, business output and confidence more generally fell in October for the first time since the initial lockdown in April: the latest BDO Output Index fell by 0.86 points in October, to stand at 77.09, well below the 95 level that indicates annual output growth.
“The green shoots of recovery which started to emerge in May have been dealt a blow by the announcement of a second lockdown,” said Kaley Crossthwaite, Partner at BDO LLP.
The extension of the furlough scheme to March provides some medium-term reassurance for employees, but, she suggested, fears of mass redundancies have merely been pushed back rather than solved.
“That said,” she added, “with many businesses now adapted to life under lockdown, the second dip isn’t expected to be as deep as the first shock.”
Sourced from BDO, IMRG, The Drum