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The retail sector is going through a prolonged period of upheaval. Factors such as changing consumer behaviour, increased internet shopping and challenging economic conditions are changing the way retailers operate and engage with their customers. The coronavirus pandemic has added to these challenges accelerating trends such as increased online shopping and adding economic challenges through lockdown restrictions.

This briefing paper describes the current state of the retail sector in the UK using data and recent reports on the industry. Sometimes due to data availability, data refers to Great Britain only. This briefing covers the retail sector only (not the wholesale sector) and does not provide information on government policy in the retail sector.

Key figures

  • Retail sector economic output was £97.0 billion in 2020, 5.2% of the UK’s total economic output and a 2.5% fall on 2019.
  • There were 3.0 million jobs in the retail sector in 2019.
  • There were 310,000 retail businesses as of 1 January 2020

In 2020, retail sales in the Great Britain were worth £437 billion, down 0.6% on 2019. For every pound spent in 2020:

  • 41 pence was spent in food shops – a 7% rise on 2019
  • 9 pence was spent in clothing shops (including textiles and footwear) – a 25% fall on 2019
  • 8 pence was spent on automotive fuel – a 25% fall on 2019
  • 8 pence was spent in household goods shops (including electronics and furniture stores) – a 1% rise on 2019

Impact of the pandemic on retail sales

At the onset of the Covid-19 pandemic in March 2020, retail sales fell dramatically as lockdown restrictions closed non-essential retail stores. Retail sales as a whole recovered to pre-pandemic levels by June 2020 before falling slightly again as non-essential retail closed over the winter. Sales recovered strongly in April 2021 with the reopening of non-essential retail.

Different types of retail stores have had very different experiences during the pandemic, with sales in clothing stores and fuel seeing the most significant falls during 2020.

Internet sales

Internet sales have been rising since 2008 (when ONS data began) reaching around 20% of all retail sales in Great Britain in 2019. Online sales rose sharply at the onset of the pandemic as physical stores were closed and have remained over 28% of all sales since.

Store closures

In 2020, 54 retail companies with multiple stores ceased trading, affecting 5,214 stores and 109,407 jobs according to the Centre for Retail Research (note that this should not be interpreted to mean that this many jobs have been lost). This is the highest number of store closures since 2008 and 2009 following the financial crisis.


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