Across the world, businesses have been shaken by the effects of the pandemic, some reaping fruitful rewards and others falling to a tragic and abrupt death. COVID-19 has altered how, why when, and where we shop. For some, it has been a time to readdress our consumerist habits, choosing to only buy what we need. For others, things haven’t changed all too much.
Prior to the pandemic, the UK’s ten biggest retailers based on sales list had some disparity. Littered in with the supermarket giants were John Lewis, JD Sport and Primark, splitting the list 50/50 between food and non-essential retailers. Comparing the figures between 2019 (pre-pandemic) and 2021 reflect several social and economic changes.
Many UK consumers lack the disposable income they previously had
Although the labour market is slowly recovering, COVID-19 caused widespread unemployment, forced redundancies and extensive furloughing. Between Jan-Mar 2020 and the fiscal calendar for Aug-Oct 2021, national unemployment levels increased by 3.6%.
This fall in unemployment most poignantly affected lower-skilled workers and those vulnerable, namely the demographics of 16-24-year-olds and those 65+. With younger and older people becoming increasingly economically inactive, it is no surprise that 2019 big hitters such as JD Sport and John Lewis have fallen down the rankings.
With limited expenditure for non-essential services, especially for the aforementioned groups, the stage is left wide open for supermarkets to take a monopoly. Their ability to transcend the age barrier has placed them in an untarnishable position of being essential for everyone. The pandemic has highlighted that companies who rely on the majority of their revenue coming from a specific demographic will suffer. Regardless of their pricing strategy, supermarkets can evade this pandemic-stemming issue and thus continue to take pole position economically, especially in times of crisis.
Supermarkets are King
In 2021, 8/10 of the biggest retailers in the UK were supermarket chains, and the other two, Amazon and Boots, offer a similar variety of essential products, such as food, medical supplies and electricals. It is reassuring in some ways to see the data reflect food being a necessary retailer during a crisis. But will it continue into the future? And is this a good thing?
As supermarkets continue to monopolise the market, their immense power is leading to some serious social and ecological consequences. Supermarkets have not only shaped the way we address agriculture but led us to the belief that food is a limitless resource. As we continue to buy into the supermarket experience, we continue to put the planet, farmers, and independent shop owners at risk.
The rise of Asda, Aldi & Lidl.
In 2019 budget supermarkets such as Asda, Aldi and Lidl didn’t get a look in. Fast forward to 2021, and the situation looks very different for them. Sitting third, sixth, and tenth respectively, the COVID-19 pandemic has been the perfect storm for these low-price competitors. Consumers have continued to need food throughout the pandemic without the ability or desire to spend more on their essentials. With their competitive pricing strategy and emphasis on own brands products and accessibility, these low price retailers have cemented themselves as competitors to be worried about for the current economic climate and beyond.
The influence of Amazon
Amazon has grown to unreachable heights thanks to the pandemic. Offering its customers just about anything within hours has altered the checkout process forever. Amazon has delivered its customers a USP unheard of before and thus embedded the expectation of instant gratification in their customers’ minds. But the repercussions for Amazon’s rapid turnaround time has set an unsustainable precedent for other companies to follow. Now, consumers expect deliveries to be within 24 hours and, with Amazon Prime, at no cost at all.
Although Amazon has forged an incredibly useful and accessible platform, they promote an unrealistic business model which many smaller, independent retailers cannot mirror. The backlash of our dependence on Amazon means we no longer look to our local marketplace for similar products in favour of supporting largely unethical and unsustainable practices.
The pandemic has thrust dramatic changes upon the world, but for all its financial setbacks, the top ten UK retailers made just short of £20 billion more revenue in 2021 than in 2019. With people’s expenditure increasingly concentrated on the food industry, is the future of big business one filled with aisles of ready meals? Or will post-pandemic life see the return of non-essential consumerism? Only time will tell what the post-pandemic marketplace will look like, but it doesn’t look like the reign of the supermarket is coming to an end anytime soon.
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