Covid impact: UK e-tail saw five years' worth of growth in just a year

By

Sandra Halliday

Published
Feb 12, 2021

UK retailers had been expecting a steady shift towards online shopping for some time, but the impact of the pandemic changed people’s behaviour very rapidly and the country saw the equivalent of five years of online retail sales growth in just a year.

That's according to new research from NatWest and Retail Economics, published by City AM. It said e-commerce sales had accounted for 19% of retail spending in 2019 but leapt to 28% in 2020 on the back of lockdowns and consumer caution about mixing in physical shops.

And importantly, plenty of consumers have changed their habits permanently with as many as two in five saying that the past 12 months of crisis have transformed how they’ll shop in the future.

Just how big the change was can be seen from the fact that last year, almost half of consumers made a new purchase online that they would previously have only ever bought in a physical location.

But there was some glimmer of hope for physical shops in the research as cancelled holidays, restricted socialising and saving money on commuting have boosted the amount of money consumers have to spend once they’re able to get out and about again.

And 10% of those surveyed said they'd spend more this year than they did in 2020. 

But the strength of that spending resurgence still depends very much on how long the pandemic restrictions last and how how much further disruption they cause.

Most consumers aren't expecting a fast bounce-back with fewer consumers thinking life will be back to normal by June than the larger numbers who think we'll have to wait until September or even December. And more than a third even think it could take more than a year to truly get back to normality. Such pessimistic consumers are more likely to cut their spending this year compared with those predicting a fast bounce-back.