Retail will suffer a $2.1 trillion loss globally in 2020 due to the coronavirus pandemic: Forrester

Global retail sales in 2020 will decline by an average of 9.6 per cent globally, a loss of $2.1 trillion, due to the impact of the coronavirus, according to new analyst forecasts. Forrester also predicts that it will take four years for retailers to overtake pre-pandemic levels. 

According to Forrester’s updated retail forecasts across North America, Asia, Europe, and Latin America, the impact of the coronavirus on retail sales will vary worldwide given the regional differences and considering that each country is at a different stage of the pandemic.

The report, which uses forecast modelling to identify the long- and short-term impact of COVID-19 on retail, reveals globally non-grocery offline sales will see a 20 per cent growth contraction in 2020.

Retailers will continue to face growth constraints, with a lot of brick–and–mortar retailers predicting losses in 2020. Many will also assume that their growth in online sales will not be enough to offset the lost sales from store closures. 

In Asia Pacific, the loss of sales is predicted to reach $767 billion in 2020, a decline of 10 per cent from 2019. 

China is the most negatively affected country in the region, with $192 billion of retail sales lost in January and February of 2020 compared to the same period in 2019. Forrester expects a drop of $658 billion for the full year of 2020 when compared to 2019, equaling a 14.7 per cent decline in retail sales.

“COVID–19 is significantly impacting the global retail landscape,” said Michael O’Grady, principal forecast analyst at Forrester.

“Retail categories like grocery and essential consumables are performing well, while other categories like fashion, beauty, and cosmetics are seeing a marked decline in consumer spend. In 2020, there will be a significant decline in global retail sales, particularly with non-essential items sold offline, which will be a big challenge for brick–and–mortar retailers.

“Online sales, however, will be more resilient. To navigate the crisis, retailers need to manage their costs and drive their ecommerce sales and services as much as possible.” 

In the US, retail sales will fall by $321 billion in 2020, a decline of 9.1 per cent from 2019. 

Similar losses are expected in Canada, with total retail spending expected to decline by $25 billion in 2020, representing a 7.7 per cent drop from 2019. 

Across five European countries (the UK, France, Germany, Spain, and Italy) retail sales will lose €260 billion across in 2020, a decline of 10.4 per cent from 2019.