Following a surge in online sales in 2020 thanks to COVID-19, UK shoppers are predicted to further increase their spending as new data forecasts £120.48bn of online purchases in 2021.
Despite a turbulent year, during 2020 online sales in the UK saw a significant increase of 46.5%, with British consumers spending £110.6bn online as physical stores were forced to close during long periods of lockdown. Despite physical stores re-opening in April 2021, a further increase of £10bn (9%) is expected for online sales this year. UK consumers are buying more goods online than ever and by the end of 2021, online sales will make up almost a third (30.2%) of overall retail spending. This is 11% more than the share in 2019, pre-pandemic.
Looking ahead to 2022, total online spend will begin to level out, marginally increasing by 0.10% to £120.6bn. However, it is estimated that the share of online sales as a proportion of total retail spend will fall to 28.1% as people get back to shopping at a mix of online and offline retailers.
In terms of the performance of physical outlets during the pandemic, total sales in bricks and mortar stores fell by a colossal £35.3bn when comparing the period 2019-2020 to 2020-2021. However, the report shows a steady recovery for the year ahead, with a forecasted increase of £3.9bn (1.4%) in physical sales in 2021. Despite the rise in physical store sales, it is expected that there will be a large disparity between food and non-food stores. Non-food sales in physical stores are expected to rise by 10% (£12.5bn) between 2020 and 2021, reaching £137.1bn as people return to the shops after long periods of closure. Food sales on the other hand will see a 5.4% decline from 2020 to the 2021 forecast as life returns to normal and people spend less time eating and drinking at home.
Despite the upward projections, nearly two thirds (60.5%) of consumers think they will spend less online than they did during lockdown. Almost a quarter (23%) say they will spend just as much as they did during periods of lockdown, and 16.5% say they will spend more online.
Anita Naik, Lifestyle Editor at VoucherCodes.co.uk, commented: "The pandemic has acted as a catalyst for many changes in the retail industry, especially the migration of more consumers to online shops and people relying more heavily on online retailers than in the past.
"Despite a difficult economic period, it's encouraging for the UK's retail industry to see that shoppers are still keen to spend money in-store as well as online. Whilst physical stores have struggled over the past year, it's great to see a real desire from consumers to get back to shopping in-store.
"That said, it's important for people to remember to purchase within their means and shop around for the best deals."
