Economics for Business: Impact of COVID-19 on UK Retail and Policy

This report provides an economic analysis of the UK retail sector, focusing on the impact of the COVID-19 pandemic. It begins with an introduction that highlights the significant disruptions caused by the pandemic, affecting consumer behavior, business strategies, and the overall economy. Task 1 delves into supply and demand analysis, examining how factors like employment, local demand, complementary goods, and the state of the economy have influenced consumer retail demand. The analysis includes graphical representations to illustrate these shifts. Task 2 explores the governmental and economic policies implemented by the UK government to mitigate the negative effects of the pandemic on the retail sector, aiming for economic recovery. The report concludes by summarizing the key findings and discussing potential strategies for the retail industry's resilience and growth in the face of ongoing challenges. References are also included.

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...............................................................................................................................................7
Governmental and Economic policies of UK for economic recovery from loss of consumer
retail spending..............................................................................................................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12
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INTRODUCTION
According to the analysis it has been identified that approximately the entire business sector
in all around the globe as affected due to the outbreak of corona virus that negatively impact
upon the growth, development and sales of organisation in every sector. In addition to this, it has
been identified that covid-19 also affected customers shopping behavioural pattern that will have
long-term impact upon business operations strategies (Donthu and Gustafsson, 2020). This
makes organisation to undertake advantage of attractive strategies in order to influence behaviour
pattern of customers. It is also essential for organisation assure that long-term sustainability in
respective industry segments. Furthermore, according to the analysis it has been evaluated that,
B2B, E-Commerce and B2B all the essential segment in retail industrial sector is severely
affected due to this pandemic.
In this report formative discussions has been included on the data and information which is
essentially required by organisations to have proper understanding of the extent at which retail
brands is affected over the past few months due to the lockdown and covid-19, as to have
effective awareness of this aspect supply analysis technique, information and demand analysis is
being undertaken in this report. With the help of this organisations can evaluate the extent of
negative impact along the positive shift in demand for retail goods and services. In addition to
this, present report also ensures UK Government strategies, economic policies and measures by
which organisation can effectively overcome with the loss of covid-19 impact.
Task 1
Supply and Demand analysis to determine the factors impact on consumer retail demand
The income effect and shift in employment –
Employment is seen as an essential factor that has a significant influence upon demand of
products and Services within retail industrial segment. It has been identified that individuals
those who have steady source of income have expectations to continue assure same as they can
be contribution in spending more that can significantly shaped demand curve towards right.
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However in context with unemployment and its gradual increase it can possibly impact of upon
individual, as individuals who are having less source of income can be seen in decreasing their
demands to purchase luxury and necessity good. It will negatively affect upon every segment of
United Kingdom market and can make individual to further loss their job. According to the
analysis it has been identified that there are many segment in retail industry segment in United
Kingdom are engaged in the process of hiring in order to provide to send to customers. As per
the report analysis of BBC it has been identified that in United Kingdom many companies are
making their employees to take voluntary retirement in order to quit that job. It can negatively
affect economy this can affect production in customers purchasing power and can increase
customers demand for retail goods and services that can be their basic command rather than
luxury products.
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 –
As per the above analysis it has been evaluated that corona virus or covid-19 pandemic have
severe impact upon customers and economics around the world that affect upon growth and
development of all the segments in the entire nation (Richards and Rickard, 2020). Likewise in
the provinces of United Kingdom covid-19 pandemic negatively impacted upon GDP,
employment rate and also essential aspects of economy in countries. It has been identified that
retail industry is a major contributing industry in country growth however this industry is also
being affected by the covid-19 make. It has been identified that food and clothing retail segment
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will continue to suffer losses. In this it is essential for government to make improvement in
economic reforms in order to support organisations as the analysis. It has been identified that
entities for performing their operations in manufacturing hospitality product and services will
expected to see stable growth but those organisations that are engaged in tourism them will
continue to expect out fall in 2020. Due to this end the make government are subjected to enforce
restriction on domestic and international travel and tourism practices which is having negative
impact on this industry. It is essential for government to enforce strategies and policies in order
to provide number of opportunities through which the industry can overcome from the losses. In
addition to this, entities those who are engaged in offering for material supply also faced many
losses entities who are engaged in conducting their business in small sector are subjected to see
heavy losses. However food and grocery organisation will continue to see increase in sale of
products it has been identified that companies that are performing their store through digital
media see comparatively tremendous growth and compared to physical stores.
Figure 1: Annual Retail sales in UK with pre and post coronavirus forecast. 2020
Complementary or substitute goods –
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It is the element that is having direct impact about customers demand for products and
services in retail Industry. Post covid-19 it has been seen that there is a severe impact upon social
living and economics of individuals such as increasing rate of unemployment. This is negatively
affecting customer spending and purchasing behaviour pattern. According to the analysis it has
been identified that during lockdown individuals are demanding for food and groceries in the
provinces of United Kingdom and even in other countries. This increases demand of some of the
products and services such as daily essential commodities. Furthermore it has been underlined
that consumers who are having low income sources may find themselves to get outrage from
these products or substitute goods. This has shift the demand of luxury retail goods to left and
demand of complementary towards right in following way –
Price
D1 D2 here, D2 = Increase in demand of complementary goods
D3 D3 = Decrease in demand of luxury retail goods
Quantities of retail goods
State of the economy –
It has been Identified that individual really feel more confident when economic growth in
stable within a country and in a regular manner. This factor is determined as most important
element that effectively influences customer demand in context of retail services and products.
Due to the continuous spread of corona virus pandemic make government in all around the world
to enforce lockdown and strict restrictions. Main aim behind this is to break the chain of this
virus. It has been underlined that due to this lockdown lead government of United Kingdom to
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face reduction of pounds in stock market. This affected economy of country in a negative manner
according to the analysis that have been identified that post lockdown customers are purchasing
products and services and are gradually making their return, this lead towards measuring slow
recovery in economic growth and stating positive sign. However, government of the United
Kingdom imposed second clock lockdown that may lead United Kingdom to face deepest
reception. However there is a 0.8% increase in retail sector however, fashion and clothing sector
is continuously facing with the decrees that can lead country to face heavy economic losses.
Task 2
Governmental and Economic policies of UK for economic recovery from loss of consumer retail
spending
After the analysis it has been identified that corona virus pandemic have negative and
severe impact upon economy around the world and affected each and every sector in all around
the world and lead towards creating number of issues such as decrease income level of
customers, change in their buying decision, increases in unemployment and more. It is essential
for government organisations all around the world to enforce number of relaxing economic
measures and policies in order to support organisations to support them to recover from the
losses that has been faced by them due to this pandemic. It has been identified that there are a
number of government policies and economic measures that United Kingdom government
enforced maim aim behind this is to slow down the bad impact that has been faced by
organisation due to the novel corona virus. This pandemic affected growth development and
profitability of business at great extent and make them to nearly survive. In addition to this it has
been identified that from past many months covid-19 affected supply and demand, daily
operations of retail industry. As per the analysis it has been underlined that Retail Industry is
having major contribution in growth and development of United Kingdom as in this industry
there are having number of organisations that are providing customers from the basic needs to
luxury needs. This makes government of country to support this sector with the help of different
relaxing policies such as deduction in tax and more. In addition to this it has been identified that
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organisations in this segment is also offering number of employment opportunities to individuals
around the world, but after this pandemic that retail industry in United Kingdom and other
country measured significant decrease in employment opportunity that automatically decreases
household income. In addition to this after the evaluation it has been underlined that retail
Industry is one of the labour intensive industrial segment in United Kingdom but however due to
the covid-19 there was serious consequences faced by this industry. Thus, it is important for
government to support the entities in this segment in order to assure sustainable growth.
In order to cope up with this situation government of United Kingdom is required to take
advantage and suggestion from many experts in experienced economist. With the analysis it has
been identified by government that, even due to the covid-19 many organisations in this segment
are still engaging in the process of hiring individuals. This aspect tax can be seen by policy
makers through which they can revive the economy of this segment. It has been analysed that
ALDI which is the largest retailing organisation operating their business services in United
Kingdom is planning to recruit more than 12000 individuals for their upcoming new store before
Christmas Eve year (The companies still hiring in the UK during coronavirus crisis, 2020). In
addition to this the Lidl is also planning to open 25 new stores in coming six months that will
automatically lead towards creating thousands of job opportunities. However it has been
surprisingly seen that these organisations does not merely conduct their operations on online
channel but are still they is still conducting their operations while having highest sales
performance. By evaluating this it has been identified that these stores are offering sanitized and
properly hygenic environment to customers. This influences customers as they feel safer in the
environment which is being offered by the stores. Retail industry segment is really contributing
in GDP of government thus it is essential for government of United Kingdom to upon all the
aspects and provides support to this industry. In this, government can provide many Health Care
safety measures in order to support some small retailers. With the help of this government can
measure significant increase in employment as well as GDP rate:
Along with this government is also required to emphasize upon providing relief in taxes and
other charges in order to revive retail organisations from the worst impact of covid-19. There are
some certain forms of measures being defined below that can be considered by government:
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 Government of respective country is required to assure that liquidity assistance scheme
will be easily accessible especially to small retailers as this can enhance their ability to
conduct business which automatically in hence their growth.
 Government is also required to offer additional assistance business organisation in
retailing segment those who gets severely affected and thriving to even survive. In
addition to this, organisations those who faced major issue in labour supply are also
required to get support from government.
 Government is required to make sure that the entire organisation in retail sector maintain
Health Care guidelines like social distancing as with the help of this is entities can attract
number of customers.
 Government is required to make sure that competition in retail Industry segment will be
more aggressive before covid-19 as with the help of high competition companies can
ashore higher sales.
 Organisations operating their functions in retailing segment are required to diversify their
sales channel. In addition to this government is also required to offer their support in
terms of small break and motor retailer in order to ensure that they have significantly
developed their online presence.
According to the above analysis it has been identified that with the help of all these
measures government authorities can offer liquidity assistance in easy manner which can be
access to all the operators in retail industry. Due to covid-19 non essential retailing product face
number of issues, with the help of liquidity government can support these organisation to
overcome from the crisis (Goeb, Boughton and Maredia, 2020). In addition to this government
can also provide large emergency support to the organisations especially to small stores and
shops. With the help of liquidity assistance government can help business to overcome from the
losses. In addition to this United Kingdom government is also required to ensure that the
customers not only depend on digital online services, with the help of this they can maintain the
balance and can enhance sales of physical store. In addition to this by providing financial
incentives employees who are operating their business services in this sector can also turn out to
be a fruitful measure through which assistance or support can be provided to this sector.
Government by also relaxing labour tax can smooth the demand and supply curve and can
support retailers to conduct their operations.
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CONCLUSION
As per the above-mentioned analysis it has been concluded that corona virus pandemic
severely impact upon business operation of the entire organisation in every sector. Due to this
pandemic some of the sectors are thriving to nearly survive. In addition to this has been
evaluated that covid-19 not only affected business operation and practices but also affect
behavioural pattern and shopping experience of customers in all around the world. Along with
this outbreak also affected countries’ economies around the globe that enhances the issue of the
decrease in income level and unemployment. Thus, in order to overcome this situation it is
essential for government in all around the world to undertake significant measures and strategies
with the help of relaxation in taxes, relieving policies and other relaxing measures. With the help
of this government can provide positive assistance to the organisation in all around the world
through which these entities can overcome with their losses of covid-19 pandemic.
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REFERENCES
Books and Journals
Donthu, N. and Gustafsson, A., 2020. Effects of COVID-19 on business and research. Journal of
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Goeb, J., Boughton, D. and Maredia, M.K., 2020. Monitoring the impact of COVID-19 in
Myanmar: Agricultural input retailers (Vol. 8). Intl Food Policy Res Inst.
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Agricultural Economics/Revue canadienne d'agroeconomie.
Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, A., Iosifidis, C., Agha, M. and Agha,
R., 2020. The socio-economic implications of the coronavirus and COVID-19 pandemic:
a review. International Journal of Surgery.
Paul, S. K. and Chowdhury, P., 2020. Strategies for managing the impacts of disruptions during
COVID-19: an example of toilet paper. Global Journal of Flexible Systems
Management, 21(3), pp.283-293.
Richards, T .J. and Rickard, B., 2020. COVID‐19 impact on fruit and vegetable
markets. Canadian Journal of Agricultural Economics/Revue canadienne
d'agroeconomie.
Roggeveen, A. L. and Sethuraman, R., 2020. Customer-Interfacing Retail Technologies in 2020
& Beyond: An Integrative Framework and Research Directions. Journal of
Retailing, 96(3), pp.299-309.
Seetharaman, P., 2020. Business models shifts: Impact of Covid-19. International Journal of
Information Management, 54, p.102173.
Singh, S., Kumar, R., Panchal, R. and Tiwari, M. K., 2020. Impact of COVID-19 on logistics
systems and disruptions in food supply chain. International Journal of Production
Research, pp.1-16.
Verma, S. and Gustafsson, A., 2020. Investigating the emerging COVID-19 research trends in
the field of business and management: A bibliometric analysis approach. Journal of
Business Research, 118, pp.253-261.
Online
How Coronavirus (COVID-19) Is Impacting Ecommerce. 2020. [Online] Available Through:<
https://www.roirevolution.com/blog/2020/10/coronavirus-and-ecommerce/>. The companies still hiring in the UK during coronavirus crisis. 2020. [Online] Available
Through: https://www.theguardian.com/world/2020/jul/31/how-covid-19-has-reshaped-
the-jobs-landscape-in-the-uk Annual Retail sales in UK with pre and post coronavirus forecast. 2020. [Online]
Available Through: <https://www.statista.com/statistics/1111013/pre-and-post-
coronavirus-growth-forecasts-for-retail-uk/ >. Covid-19 and the retail sector: impact and policy responses. 2020. [Online] Available
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 Unemployment rate: How many people are out of work?. 2020. [Online] Available
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