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Pandemic habits, are they temporary, or here to stay?


On the 1st of April, the Office for National Statistics released new data indicating that the economy is on track for growth as business activity is increasing, evidenced by total UK online job adverts being at 96% of their February 2020 level.


However, the new data also reflects the changing consumer habits associated with the lockdown measures imposed as a result of the national lockdown.


As a result of the lockdown, consumers' shopping habits have changed as individuals adapted by favoring online shopping methods.


This is as a direct result of high street stores being closed, yielding a 57% reduction in footfall.


Consequently, retail sales are still below their pre-pandemic peaks, and, clothing retailers have been hit hard in particular with a 50.3% drop in sales.


Additionally, the catering and hospitality industries were also hardly hit, with the volume of job adverts being at 43% of February last year's average level.


So, because consumer habits are favoring online methods, there has been an increased demand for transporting goods and services to homes across the nation.


Therefore, this has led to a significant increase in employment in this sector, as evidenced by job adverts being the highest in "transport and logistics" at 181% of its average level in February 2020.


Consequently, the volume of motor vehicle traffic on the 29th of March 2021, was 4% higher than the previous week, making it stand at 84%, the same level which was seen in the first week of February 2020.


The question is, is this increased demand for online-shopping methods temporary, or is it here to stay post-pandemic?


It is likely the increasing demand for online shopping is here to stay as the pandemic primarily opened up the online shopping industry to groups such as the elderly.


Elderly consumers previously chose to shop in the high street or at a local supermarket however, due to the pandemic this was no longer an option due to associated COVID-19 health risks.


The closure of many high-street stores has consequently opened up a new consumer market to the online shopping industry as many elderly people will continue to shop online due to the increased access and ease of use.


Hence, this permanent change in consumer habits would have adverse effects on the high-street industry.

The high street may not see pre-pandemic footfall levels return as consumer habits move away from high street shopping which has been on a steady decline across the nation mainly due to lack of transport services and the permanent closure of many high street businesses.

The combination of these factors further reduces demand for high-street shopping shown by the closure of many prominent high street shopping departments closing such as Debenhams which is moving online following the Boohoo purchase with 12,000 high street jobs lost.


So, this collapse of the high street industry will yield significant job losses within the economy as the lack of demand will lead to structural unemployment occurring, illustrating how a temporary shift in consumer habits will hurt the UK economy.

 

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