Impact Analysis: COVID-19's Effects on the Retail Industry Dynamics

This report provides a quantitative analysis of the impact of COVID-19 on the retail industry. It begins with an overview of the retail sector before the pandemic, highlighting its profitability and growth. The report then delves into the disruptive effects of COVID-19, including business closures, supply chain disruptions, and shifts in consumer behavior towards online shopping. It examines the challenges faced by retailers, such as adapting to changing regulations and managing economic uncertainties. Furthermore, the report discusses recommendations for retailers to sustain their businesses, including shifting to crisis management, scenario planning, and optimizing online propositions. It also incorporates ONS data to illustrate the decline in retail sales and the surge in online sales during the pandemic. The analysis covers strategies for maintaining financial stability, delivering value to customers, and adapting to the increasing demand for digital retail solutions, emphasizing the need for retailers to balance economic requirements with community roles to ensure long-term sustainability and competitive advantage.

Quantitative Data Analysis
Report

Executive summary
Retail industry is one of the largest within business. It has been seen that retail industry is having
several changes after the economic condition decline due to COVID 19. The global economy
crashed after this pandemic and it has resulted in a challenging forecast period for the retail
industry (Zamfir and Iordache,2021). This research is all about the analysis of COVID 19 impact
on retail industry.

Table of Contents
Quantitative Data Analysis Report.....................................................................................1
Impact of COVID 19 on retail industry – Business research...........................................................3
Introduction......................................................................................................................................3
Literature review....................................................................................................................3
Impact of COVID 19 on retail industry...........................................................................................3
Conclusion..............................................................................................................................7
Appendix........................................................................................................................................10
Graphs...................................................................................................................................10

Impact of COVID 19 on retail industry – Business research
Research aim
To analyse the Impact of COVID 19 on retail industry.
Literature review
Impact of COVID 19 on retail industry
As per the views of Akin (2021), Prior to pandemic situation of Covid 19, retail industry
was fully settled. The profitability level of the industry was great and the companies under retail
industry enjoyed large sales volume. It helped the industry in expanding its productivity level
and hence, became the largest global industry. The operations were running in a smooth way and
there was no such assumption made by the managers within retail industry that there can be the
situation when there will be sudden economic slowdown. But in 2019, the wave of Covid 19
took place for the first time and it greatly hampered functioning of all the industries. Retail
industry was majorly impacted by Covid 19 as the businesses got closed because of economic
lockdown. As the coronavirus constantly spread around the world, there had been significant
impacts on behaviour of consumer, demand of product, retail stores and factories. Pandemic
situation of Covid 19 influences the political and economic system of the nations.
But as per the viewpoint of (Anggraini, 2020) COVID 19 has mostly impacted the
lifestyles of people that includes digital technologies to support them. Its impact on retail sector
is heterogeneous and is depended on the compound effect of three basic features. The first one is
measure of social distancing on individual retail businesses. On one hand, most of the inessential
activities of retail sector have been closed. On other hand, essential retail sector businesses often
operate their business in a very tough condition. There was shortage of human resources and
supply-chain within the business that is a major disruption. Secondly, social distancing and
economic lockdown measures impacts the dealers of retail industry through physical stores
greater than online retailers. Thirdly, the retail industry is featured by the business coexistence
with different abilities and skills to face those crises. During pandemic situation of Covid 19, the
operation of the businesses got declined and there was a decrease in the profitability level of the
industry. As all the nations were in quarantine and customers across the world begins to avoid
the human interactions and the retailers were scrambling to adapt their businesses. They
identified the global response to Covid 19 that it greatly impacts the business in a negative way.

Retailers makes an understanding that the situation under coronavirus is altering on a daily basis
and they have very little time to respond to the changes. This time period hinders the business of
retail industry to a large extent.
Whereas Romen Mukherjee argues that the retail industry has seen a lot of uncertainties
in the past and that the pandemic has been one of major challenges that it had to deal with (Retail
after Covid -19: Hoe innovation is powering the new normal, 2021). Due to quarantine
measures, retail clients have been opting for minimal human touch and moving in the direction
of online intake styles. Now, as some countries begin to re-open shops, eating places, and other
public places, shops are quite aware about the significance of fitness safety for each their
customers and buddies on this new submit-COVID global.
While new equipment designed to offer a more customized in-save revel in, like AR and
VR, might be on preserve at the moment, other digital technologies can play a position. For
instance, with pc vision and aspect computing, shops can study a lot from how humans save and
react to offers on save cabinets. With shops already beginning once more, retailers should use
them otherwise. Digital answers can assist stores remodel save codecs. Technology-powered
shops like the Amazon Go outlets are demonstrating that there may be a low-touch, safe haven
retail outlet model that might work and that does aid the customer journey.
After one year of this highly infectious disease, most of the countries are step by step
lifting the barriers which are imposed by the political system of the nations to closure of
inessential stores, venues and bars along with a restriction on large public gathering. Due to this,
retail industry faces significant shifts that are related to the amount of growth in sales. It was
already dropped down in between 2019 and 2020.
The pandemic situation has continued to influence the social, economic and health factors
across the world. The retail industry was at boom before the pandemic situation of covid 19 but
now this industry has tested to its limits. Because of quarantine measures, customers of retail
industry have been opting for minimum human interaction and are stepping ahead towards online
business. Now, some nations begin to open the shops and stores, restaurants and many public
places, retailers within the industry are highly aware of the significance of health consciousness
for both their potential customers and associates after the pandemic situation.
The situation of covid 19 is complex but the retail industry should see the opportunities to
continue their business for sustaining in the market (Bhattacharyya and Thakre, 2021). There are

several recommendations that retailers must follow to continue their business in industry and
some of them are described as under:
 Shift from business continual to crisis management: Retailers of the industry are going
to continue their business plans for reassuring the market-share and maintain constraints
of inevitable supply chain. They are also managing demand shocks by giving priority to
critical activities of business and generating contingency plans to disrupt. Now retailers
should plan and develop a quick and flexible crisis management capacity, not when it
will become necessity.
Scenario plan to the survival minimum: Most of the industries are now only in the initial
stages of response in management of immediate obstacles for their own staff through declaring
restrictions on travel. Retailers rapidly requires to assume a level of scenarios of how covid 19
influence their customer-base and their suppliers along with their own operations. Generally,
there are three scenarios that should be considered by the retail industry. The first one is worst is
over in a time period of two or three months. Within this, intense crisis is greatly resolved within
a period of two or three months where the business of retail industry gets back to their normal
form at a rapid rate. The next one is six months to regain control (Bizoza and Sibomana, 2020).
More extensive time period of break over six months results in a no-growth scenario for
economy or a bounded recession. The last scenario is 12+ months ongoing pandemic. In this
scenario, the virus spreads widely and customer remains in extent state of anxious initiating
recession across the world.
 Triage the bricks and mortar estate now: According to this recommendation, each
brick and mortar store will get influenced severely on the basis of local custom er
demand and local consumption. Retailers within the industry will required to
predetermined the demand for their estates at the level of store under all the scenarios
they had faced. As fast as the situation develop these plans will have to be developed as a
local demand changes. Retailers are recommended a rapid triage approach that is on the
basis of an assessment of sustainability of store locations.
Plan for the long haul: Retail industry need to maintain their funds or finances over both short
or long term. Cut in the costs may help today in achieving the short term objectives but it will not
work in attaining the long term objectives. It starts with full understanding of all executions that
are presently running and those which are designed for the near future (PRONCHEV and

SUSHKO, 2021). Retailers within the industry requires are recommended to make tough
decisions regarding the activities and investment for understanding that are generally required for
business sustainability both in short and long term succession. There are several executions that
must be constantly moving within the industry. Deliver value at a rapid rate through realisable
cost savings instead of growth of revenue given alike declining in demand. The industry must
have clearly-defined and measurable focussed results which can be redirected as well as tracked
when required at continuous intervals. Retailers within the industry must not rely on a small and
those teams which can be bifurcate in units in near future. They might suffer from failures and if
required then reallocate the team members so that profitability and productivity of the industry
increases.
Be force for good for your customers: Retailers are required to balance their economical
requirements against the roles they play in their community. For some of the market-share, an
ongoing supermarket will offer them with reassurance while they feel that they are alone (Qian,
2020). Through this way, the retailers will play a key role in protecting and feeding the local
public. This requires few changes to follow policies and adopt processes like reduce the sales of
particular good or service or serving the products of other company door-to-door to satisfy the
needs and desires of target-audience.
Deliver on the demand for digital, but economically: Many retailers presently recognising that
online shopping is taking a great pace. But the process of e-commerce is more expensive than
their costs. Hence, this situation can cause financial problem in near future. For taking benefits of
this opportunity, retailers are required to recommend some strategies (Soni, 2020). Optimisation
of online proposition should be there to offer the product or service in a reasonable amount by
maintaining a level of profit. Reduce the buying of necessary products to control and monitor the
demand along with giving necessities to large number of customers.
Through this process, it is recommended that retailers must follow above discussed scenarios to
maintain sustainability within the market (Buklemishev, 2020). It helps the retail industry to re-
establish its market value again in the competitive world and helps in gaining the competitive
advantage.
ONS data
In the year 2020, the volume of total sales in retail industry have seen the downfall by
1.9% which is the largest downfall in record. Although, there was rise in the online sales to the

record which is high of 33.9% as the share of all the retail spending. The pandemic have the
large impact on UK and the global economies and the retail sector is impacted by imposition of
the lockdown restrictions as well as social distancing which has resulted in changes in goods or
services which the people consume, how they consume, etc.
From the above graph, it can be analysed that there was the major impact on the footfall in
the year 2020 in retail sector. The impact is majorly on non-essential goods. As there was ease in
the restrictions of lockdown, the market has seen the increase which reflected the consumer
demand. The sales in retail sector has seen the rise as in March 2020, the sales in retail industry
started the fall and by April, the volume of total sales was 19% low as compared with February

level. The figure two shows the change in how customers have shifted to the online retailing as
the online shopping have eased the impact of pandemic. It was 60% higher in the month of May
as compared to February. The sales volume have recovered and since the month July which have
been above pre-pandemic.
From this, can be said that the covid have affected the retail industry while the trend of
online shopping have given new birth to the retail shopping. There has been massive rise in the
online shopping as compared to in store shopping as lockdown has given ease to customers to
shop from their home and get the home delivery.

Graphs
Figure 1The 2020 economic impact of the COVID-19 pandemic
(Source: COVID 19 Impact on retail industry, 2020)
From the above graph, movement of retail services index during COVID 19 pandemic is
evaluated. This is concluded that during 2009 and 2019 recession, growth of RSPI decreased but
it remained positive, despite of decrease in retail trade sales (Gordon, 2021).
The retail industry has been hit particularly hard since the government ordered people to
quarantine themselves, substantially limiting face-to-face service in stores. As customers, our
lifestyles have also been forced to adapt substantially. Because many preferred to stay at home
rather than go to the store, online shopping became very popular among individuals who had
never used it before. And, as a result of the shift in workstyles brought on by people being
obliged to work from home, life via online channels has become the norm. The digital
technology that supports the online culture has been popular for some time, but since the
outbreak of the epidemic, its expansion has increased dramatically. At the early stages of
pandemic, there is overall household demand for services and goods curtailing through social
distancing (Sladoljev and Goleš, 2021). In context of both retail purchase and retail price index,
it is seen that number of customers can be increased through online sales (Jabotinsky and Sarel,
2020).

Conclusion
From the above discussion can be concluded that, after covid-19 economic crisis as
Orchid which has made plastic impact created over economy of a country. In relation to list
various retail organizations has been implicated in a way that it has caused them use loss as they
have to close their shops in order to save cost. This made their survival very tough within the
physical market and they switch towards online mode of selling. Also can be observed that
Organization in retail sectors have to struggle or 22 covid-19 as its various process were not able
to run in more effective manner. Then in order to develop customer base organization has to shift
to digital technology which help in getting connected to its various customers all over the globe.
It can also be concluded that the outbreak of the pandemic has significantly impacted the way in
which companies conduct their business and hence, it has become very important for different
businesses to develop an effective strategy.

REFERENCES
Books and Journals
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Anggraini, F., 2020. How dynamic organizations overcame the impact of COVID-19 on industry
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Bhattacharyya, S.S. and Thakre, S., 2021. Coronavirus pandemic and economic lockdown; study
of strategic initiatives and tactical responses of firms. International Journal of
Organizational Analysis.
Bizoza, A. and Sibomana, S., 2020. Indicative socio-economic impacts of the novel coronavirus
(Covid-19) outbreak in Eastern Africa: Case of Rwanda. Available at SSRN 3586622.
Buklemishev, O., 2020. Coronavirus pandemic seriously challenges Russian economy. New
Eastern Europe, 43(5), pp.16-20.
Gordon, D.V., 2021. Price and revenue projections under alternative policy shocks due to the
coronavirus: Canadian lobster and snow crab. Marine Policy, 130, p.104556.
Jabotinsky, H.Y. and Sarel, R., 2020. How crisis affects crypto: Coronavirus as a test
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Qian, W., 2020. A First Look at China’s Consumption After Coronavirus. In Impact of COVID-
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Soni, N., 2020. Impact of COVID-19 on Business Organization, Industries and
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Zamfir, I.C. and Iordache, A.M.M., 2021. THE EFFECTS OF THE CORONAVIRUS ON
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Online
https://www150.statcan.gc.ca/n1/pub/45-28-0001/2020001/article/00092-eng.htm
Retail after Covid -19: Hoe innovation is powering the new normal. 2021. [Online].Available
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