Global retail sales will drop by $2.1 trillion in 2020
Apart from grocery and essential consumables, other categories will see a marked decline in 2020 across the globe.
Global retail sales in 2020 will decline by an average of 9.6% globally due to the pandemic, which equates to a loss of approximately US$2.1-trillion.
This is detailed in a study by international market research company Forrester. It also predicts that it will take four years for retailers to surpass pre-pandemic levels of retail sales.
According to the company’s updated retail forecasts across North America, Asia, Europe and Latin America, the impact of the virus on retail sales will vary, given the regional differences and considering that each country is at a different stage of the pandemic.
“COVID–19 is significantly impacting the global retail landscape,” said Michael O’Grady, principal forecast analyst at Forrester.
Non-grocery retail categories tumble
“Retail categories like grocery and essential consumables are performing well, while other categories like fashion, beauty and cosmetics are seeing a marked decline in consumer spend,” O’Grady said.
He continued: “In 2020, there will be a significant decline in global retail sales, particularly with non-essential items sold offline, which will be a big challenge for brick–and–mortar retailers.
“Online sales, however, will be more resilient. To navigate the crisis, retailers need to manage their costs and drive their eCommerce sales and services as much as possible.”
But he cautioned that, in many instances, retailers’ growth in online sales will not be enough to offset the lost sales from likely brick-and-mortar store closures in many markets.
Key regional retail predictions
According to Forrester, retail sales in the US will fall by US$321-billion in 2020, a decline of 9.1% from 2019. In neighbouring Canada, similar losses are expected, with total retail spending expected to decline by US$25-billion in 2020, representing a 7.7% drop from 2019.
Looking at Europe, retail sales will lose €260-billion across all the key markets of the UK, France, Germany, Spain and Italy.
For the UK specifically, Forrester expects a £56-billion loss in retail sales in 2020, an estimated decline of 11.4% from 2019. In Germany, total retail sales will fall by €60-billion, a decline of 10% from 2019.
China takes a big hit in Asia-Pacific
In the Asia-Pacific, the loss of sales across the entire region is predicted to reach US$767-billion in 2020, a decline of 10% from 2019. China is the most negatively affected, with US$192-billion of retail sales lost in January and February of 2020 alone, compared to the same period in 2019.
Forrester did not provide estimates for the African continent.