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Summary
- UK shops will remain closed amid the third lockdown restrictions.
- The prices of shops have been declining month-on-month.
- Online shopping, remote working and lockdown restrictions have weighed down heavily on the showrunners.
Apex trade body British Retail Consortium has said that December witnessed the steepest decline of 1.8 per cent in shop prices over the past one year despite big discounts being offered by non-essential retail stores during the festive period. The trade body said that the numbers are similar to that of November.
The non-essential retail is one of the hardest hit sectors in the wake of coronavirus induced lockdown. In the recent past, many players have struggled to pay their fixed costs in terms of rents or other utility bills. Some retailers even resorted to renegotiate their lease agreements with the shop owners and reduce the time period due to prevalent uncertainties in the trading environment.
(Image source: ©Kalkine Group 2020)
The festive season was their last hope for 2020 and therefore fashion outlets continued to offer discounts. The price of non-food items dropped substantially in November.
Interesting read: BRC Issues Warning Over Potential Online Sales Tax
With Brexit-related uncertainties still prevalent in the trading environment, the new coronavirus strain induced lockdown, which is expected to last until mid-February, shall certainly trouble the non-essential retailers.
The pandemic has pushed the food prices down in the UK. This is evident from the fact that the food price inflation stood at 0.4 per cent, which was the lowest since March 2018.
On the flip side, the housing market is doing well despite the third lockdown. The number of mortgages issued by the bank for home buyers has gone past 100 thousand in November, according to the latest figures from the Bank of England. Since 2007-08, the year of the financial crisis, this has been the highest number of mortgage approvals in the UK in the span of the last 13 years. The current rise in mortgage approvals is mainly due to the changing style of living as a result of the pandemic. Besides, the stamp duty holidays announced by the British Government in 2020 also helped in this regard.
Notably, the housing property market remains unlocked during the second lockdown in contrast with the non-essential retail sector. People are still allowed to move homes and make transactions.
According to a report by Britain's leading cross-party think tank Social Market Foundation, the shift towards online shopping and e-commerce transactions could turn town centres into residential hubs that can lead to 800,000 residential spaces in prime locations. Remote working and lockdown restrictions along with change in consumer behaviour can lead to shop closures and further decline in prices.
