Impact of Covid-19 on Consumer Retail Demand and Government Policies for Economic Recovery

Economics for
business
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INTRODUCTION...........................................................................................................................3
Task 1...............................................................................................................................................3
Supply and Demand analysis to determine the factors impact on consumer retail demand........3
Task 2...............................................................................................................................................8
Governmental and Economic policies of UK for economic recovery from loss of consumer
retail spending..............................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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INTRODUCTION
Coronavirus pandemic nearly affected every business sector at some extent. This outbreak
have positive as well as negative impact upon growth and development of the businesses that
lead them to face heavy losses while some are driving to fulfil their essential needs. Covid-19 not
only effected growth of businesses around the world but also changed the perception and
behavioural pattern of customers (Goeb, Boughton and Maredia, 2020). This situation forced
businesses to attract customers more in attractive manner as to conduct business and retain
consumers for long period of time. Covid-19 affected B2C, B2B, E-commerce and the entire
business segment especially those who are performing operations in retail segment. Present
report includes data and information which is essential to understand by businesses in retail
sector. This will allow them to evaluate changing behaviour of customers from past few months
after lockdown and Covid-19. Supply and demand analysis technique is being mentioned in this
report as to present this information in an effective manner through which businesses can
evaluate positive and negative shift in demand of retail goods as well as services. Along with this
report also includes discussion upon Kingdom government economic strategies as well as
policies in order to revive businesses from the losses that have been faced due to corona virus
outbreak.
Task 1
Supply and Demand analysis to determine the factors impact on consumer retail demand
The income effect and shift in employment –
Employment plays most important role which is also having high influence on demand of
goods and services within retail industrial sector. It has been identified that people those who
have stable sources of income generation are having expectations stable source of income on
continuous manner. This makes them to spend more on purchasing that will lead demand curve
shift towards right. While on the other hand increase in unemployment relative lead towards
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opposite outcome. In this people who are having less income sources will spend less on
purchasing even necessity for luxury goods, it lead words having negative impact upon every
sector of United Kingdom that will automatically lead towards loosing of jobs (Unemployment
rate: How many people are out of work?. 2020). According to the analysis it has been identified
that many segments in United Kingdom are however the engaged in the process of hiring
individual for job such as to step delivery. As per the analysis of BBC report, this has been
identified that in United Kingdom many companies are forcing its workers to quit the job that
will severely affect economy of country and lower down purchasing power of customers which
increases demand of customers for retail services and goings in order to make fulfil their basic
needs comparatively to luxury goods.
Price
D1 D2 here, D2 = Rise in demand of food and groceries
D3 D3 = Decrease in demand of other retail goods
Quantities of retail goods
UK regional or local demand factors –
Economics around the world faced massive shock due to coronavirus outbreak that not only
affected business growth and development but also have negative impact on purchasing
behaviour of customers. Similar, in the case of United Kingdom which economy is badly
affected due to the situation of Covid -19, in addition to this it has been identified that GDP and
other economic aspects in United Kingdom also faced negative impact from this outbreak. It has
been identified that business food retailing sector have stable business processes as they are
engaged in the offering of basic necessities to individual. This analysis states that food retail
sector continue to have expected growth by 7.5 billion. However in context with footwear and
clothing segment in retail Industry sector it has been identified that this segment will continue to
face losses that can be approximately to 13 billion British pound. According to the analysis it has
also been identified that those segments that are mainly dependent upon hospitality,
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