Retail Hit Hard as UK’s GDP Plummets
12 August 2020 - 17:10 by Graham Miller
The Office for National Statistics has this week published figures which show that the 20.4 per cent decline in the nation’s GDP has been topped by the 22.5 per cent reduction in output seen in the retail and wholesale industry, according to Internet Retailing.
The main culprits for these record-breaking lows are of course the pandemic and the lockdown which was imposed across the UK for several months earlier in 2020, and which is only now being lifted.
Analysts note that the retail sector was already suffering from a single-digit slowdown in the first quarter of the year, suggesting that the economic pressures exerted upon it were creating challenges for companies even before COVID-19 struck in earnest.
ONS statisticians have confirmed that since the UK has now experienced two consecutive quarters of GDP shrinkage, it is officially classed as being in a recession.
What is even more significant about these figures is that the dip in GDP experienced in the UK is twice that of the US, where coronavirus cases have been significantly higher.
Of course, the silver lining in all of this is that safe shopping online has continued to increase rapidly, making up for the fact that throughout the second quarter of the year almost no physical retail outlets were open, aside from those selling groceries and essential goods.
This is something touched upon by the Bank of England in a recent summary of the current conditions in which it points out that certain product categories managed to thrive in the e-commerce space during the lockdown, even if bricks and mortar sales slumped.
Some experts are hoping that the economy will bounce back quickly following this steep drop in GDP, although others fear that the protracted impact of the pandemic will dash hopes of a swift recovery.