GIFT AND HOME RETAILER NEWS
A Service of GiftsWholesale.Com & OmegaNet Inc.

Retail and the Pandemic - Five Years Later

Are There Lingering Effects?

This month marks the five-year anniversary of mandated shutdowns during the COVID-19 pandemic. While lockdowns, with associated masking, "social-distancing" and general panic are gone, some effects linger, according to RetailDive.

Government Giveth and Government Taketh Away

Some retailers simply didn't make it during the punishing government edicts, others survived and a few thrived. Government hand-outs to consumers in the form of "stimulus payments" artifically boosted the bottom lines of some retailers, especially big-box stores and online retailers, while small retailers suffered. Government loans and tax rebates helped, but after those dried up, many retailers struggled.

Photo by Anna Shvets from Pexels

“One point we’ve made repeatedly is that consumers, we think, still haven’t ceded what they’ve spent,” Coresight Research’s head of global research, John Mercer said, referring to the increased levels of spending shoppers adopted during that time. “But then, of course, the long-term effects of that stimulus is fueling inflation, which then obviously is challenging for consumers.”

The inflation which resulted from the government handouts during the pandemic is still being felt by consumers, which has caused them to pull back on discretionary spending. These trends have taken years to work out. Stagnation and decline has especially affected categories like home, which has fueled bankruptcies in large retailers long after COVID obsession stopped.

Finally Allowed to GO!

One trend post-pandemic is consumers spending more on services than on goods. An example is the explosion of travel that followed the removal of lockdowns. That trend will likely stabilize and return to prepandemic levels, although Mercer believes we aren't there yet.

Has E-Commerce Plateaued?

For years we've been hearing that e-commerce, especially behemoths like Amazon.com, would overwhelm physical retail. The pandemic accelerated the growth of online shopping because physical shopping was not allowed. Afterward many continue to favor shopping online. However, the idea that stores will be replaced by e-commerce is nowhere near reality. In the last quarter of 2024, e-commerce represented about 22% of total retail sales. A report from FTI Consulting suggested e-commerce is "maturing" and will plateau at about 35% during the next 10 years.

Brick-and-mortar stores have an opportunity to adapt and do things online retailers can't. “There are places where stores can fill in those gaps around e-commerce and digital if they focus on some of those,” Mercer said.

indicates a CAMEO EZ^© web site.