The UK is currently in the biggest recession in Europe and in British history, caused by the effects from the global reaction to the ongoing coronavirus pandemic as well as effects from the UK’s decision to leave the EU. The UK’s economy has shrank by over 20% compared to the first 3 months of the year, leaving the UK in it’s first recession since 2009.

One of the sectors of the UK economy which has been changed the most by the effects of this recession is the retail sector, towards the start of the pandemic as lockdown was put in place in the UK that essentially meant brick and mortar retail stores had to shut up shop for the foreseeable future, this naturally led to a drop off in retail spending in the UK.

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As brick and mortar stores shuttered though online retail stores such as Amazon, ASOS and Dotcomblinds noticed an uptick in the amount of consumers shopping online, with traditional stores shuttered for the time being consumers had no other choice but to shop online which led to a large increase in E-Commerce’s market share.

It’s important to note that in the 2008 financial crisis E-Commerce also saw a growth whilst brick and mortar stores saw their market share decline, this is likely because shopping online makes price comparison and product research a lot more easy than trying that in store, so as people became more concerned with their spending, they flocked to the online retail space.

So it’s a good indication that although the initial growth in E-Commerce’s market share was due to high streets being closed to help combat the Coronavirus, online retail may start to take an even bigger market share as the recession progresses and more people become more conscious of their spending like in the 2008 recession, this leads into why the UK Government was mulling over a possible tax on online sales to help resurrect the high street.

Even though lockdown restrictions have been loosened in July high street footfall was down 39% compared to last year, this is showing that consumers either still do not feel safe shopping on the high street or simply just now prefer the experience of shopping online as 40% of consumers in the UK who have returned to the high street say that shopping in person is a less enjoyable experience than it was pre-COVID.

All of this has created a perfect storm, wherein the high street and brick and mortar shops are going to be losing market share for the foreseeable future as internet based retailers will see theirs grow for the foreseeable future. It’s likely that until a vaccine is secured to combat the threat of coronavirus this trend will still hold true.

Once the pandemic comes to an end the future of retail depends a lot on how the government respond, if an ‘Online Sales Tax’ or some similar scheme is put in place to help revive the high street, then in person retail has a fighting chance of regaining it’s share of the market, but if the government don’t provide some sort of stimulus to the high street shops and there is no concerted effort to get people back to the high street, then it is clear that online retail will soon overtake the high street and as the high street was suffering before COVID-19, it’s likely that the pandemic and ensuing recession may be the death knell for retail on the British high street as we know it.