Retail

• In the last two weeks, 10% of businesses currently trading reported the price of goods or services sold increased more than regular price fluctuations, with the manufacturing industry, the wholesale and retail trade; repair of motor vehicles and motorcycles industry, and the other service activities industry reporting the highest proportions at 25%, 23% and 21% respectively. (ONS, 2021)[1]
• Budget announcement.
• In last month’s Budget, the Chancellor announced a 50 per cent business rates relief discount in 2022-23, with a cap of £110,000 per business. The relief will return to pre-COVID-19 eligibility for retail properties, although hospitality and leisure properties will remain in scope. The guidance for the 50% BRR fund will be published before April 2022, when the scheme goes live. (Federation of Wholesale Distributors, 2021)

Online Sporting Clothing Retailing

• The coronavirus pandemic is expected to weigh on industry revenue growth due to falling consumer confidence and lower disposable income reducing spending. Additionally, closures of gyms and sports clubs have weighed on demand. According to Sport England, over the year through November 2020, just 63% of men and 60.1% of women were active, down by 2.4% and 1.4%, respectively.
• Nevertheless, a surge in internet usage and a boom in online shopping are expected to have supported industry demand. According to the Office for National Statistics, internet sales as a percentage of total retail sales reached a record 36.3% in both November 2020 and January 2021. It remained high at 29.4% in April 2021, compared with a pre-pandemic level of 19.1% in February 2020. 
• The effects of the pandemic, including supply chain disruptions, have weighed on industry profitability. Additionally, some operators have reduced prices and included more offers to incentivise consumer spending. This is expected to constrain profit margins over the two years through 2021-22. 
• Industry revenue is expected to grow at a compound annual rate of 8.3% over the five years through 2021-22, including revenue growth of 7.5% in the current year, to reach £876.6 million. A significant factor has been shifting consumer preferences towards online shopping, supported by higher internet connectivity and usage and secure payment methods. Rising sport participation has also benefited the industry. (IBIS World, 2021)[2] 
• Delayed delivery due to the coronavirus outbreak is likely to compound intense pricing pressures and discounting in the industry.
• The pandemic has hastened the shift online, forcing clothing retailers to rethink the strategy and future of their establishments. (IBIS World, 2021)[3]

Convenience Stores

• The Government’s Covid-19 Response: Summer 2021 sets out that many of the regulations that limited convenience stores capacity have since become guidance from 19 July 2021. This means that it is now the consumer’s decision on how they manage the virus, relieving operators of the responsibility. As a result, industry profit margins are anticipated to grow in the current year.
• Total online expenditure is anticipated to contract over 2021-22, as the easing of government restrictions allow the UK population to spend less time at home. This is expected to support revenue growth over the current year, as operators rely on greater footfall for top-up and impulse purchases.
• The Office for National Statistics reported that food stores’ volume sales grew by 4.3% over 2020, compared to 1.3% the year before. Furthermore, food stores internet sales spiked by 79.3% over the same period, leaving a lasting impression on the importance of online sales in the retail of food in 2021-22. For more detail, please see the Current Performance chapter.
• IBISWorld expects industry revenue to rise at a compound annual rate of 5.1% over the five years through 2021-22 to £39.7 billion, supported by the growth of 5.6% in the current year. Changing trends, such as the growing popularity of top-up shopping, have been key to revenue growth. Another driver has been the rising number of symbol-affiliated convenience stores. Nonetheless, competition from supermarkets (see IBISWorld report G47.110) that have expanded into the small express segment has severely affected non-affiliated convenience stores. Convenience stores have also come under pressure from discount retailers like Aldi and Lidl and have cut their prices to combat competition, hampering profit margins. (IBIS World, 2021)[4]

Supermarkets

• The Office for National Statistics reported that food store online retail sales grew by 79.3% over 2020. Tesco and Sainsbury have invested significantly in their online platforms and home delivery infrastructure to capture rising demand in e-commerce.
• The easing of government restrictions has led to higher external competition for the industry, constraining revenue growth in the current year.
• The proportion of sales made online fell to 30% in April 2021, down from 34.7% in March 2021, due to the reopening of non-essential bricks-and-mortar stores. Supermarkets have remained open throughout the pandemic; however, online sales are anticipated to contract as restrictions are eased, and consumer behaviour fluctuates.
• Over the five years through 2021-22, industry revenue is anticipated to grow at a compound annual rate of 1.7% to reach £207.1 billion. The Supermarkets industry has contended with a highly competitive environment over the past five-year period, as consumer tastes and shopping habits have changed at an accelerated rate. Government policies have levied taxes on unhealthy products, such as soft drinks and alcohol, which operators have struggled to pass directly to the consumer. Additionally, rising environmental awareness has encouraged demand for veganism and vegetarianism. As a result, operators have charged higher prices on premium and certified products with greater provenance than Waitrose. (IBIS World, 2021)[5]