Changing Priorities? The End of the (Retail) World as We Knew It

changed priorities

Taken from tweet by @PhilipJEMiller

In the last three posts I have looked at the food vs non-food dichotomy in retailing as COVID19 sweeps through the country.  The figures and situation are astonishing and something no-one predicted a few weeks/months ago.

How do we make sense of it?  And what are the potential implications?

It is always foolish to bring out a crystal ball, and there is every chance what follows could be rendered stupid very quickly.  But, so what?

I have no idea when (or if) we will emerge from lockdown and what that will look like.  Some friends talk about drinking pubs dry and eating themselves stupid, celebrating some form of release.  Others are more circumspect, suspecting a multi-year haul of changed and interrupted behaviours.

If we get past the crazy food data of (much of) March and assume that things settle down somewhat then we might focus on some of the changed behaviours and speculate (guess?) if this will continue.

What do we know so far?

Consumption has been radically disrupted especially in non-food and the restaurant and leisure sectors. We have binge spent on food in supermarkets, but also in convenience and local (general and specialist) food stores. There has been a shift to online, both in multiple retailers but also for online specialist producers and local collectives. Cash has become a “dirty” form of payment and card and contactless has increased dramatically. There has also been a rapid and extensive attempt at a support exercise by the government (though its success is not known). This opens up space for more radical thinking of what sort of retail sector do we want in the future – and we need that thinking as many are reliant on food banks, emergency parcels and the like (and were so before the crisis).

This is a massive disruption and shock to our economic and social system.  Supply and demand has altered for both consumers and retailers. It should not result in things going back to the same situation as before. “Restart the economy” is the worst thing we could do if it results in the same old outcomes, or worse, if in order to pay for the measures to date there has to be a “period of austerity”. This should not be acceptable; we need to change the mindset.

But what don’t we know?

We have no idea how this lockdown ends or when it ends. We may have a permanent relaxation or periods of intermittent restrictions, and these might be on a local or a sector or some other basis. We do not yet know what damage has been done to which businesses, which towns or to what sectors. The financial and human cost has yet to be calculated.  We do not know how countrties will react in terms of trade – and with Britain a net importing country (eg. of food) there are very real supply risks ahead, let alone at the moment. There is little likelihood of patterns of international travel or trade returning to the scale or shape they were, in the medium term, or indeed ever.

In retailing, some retailers will not return.  Others are clearly seeing the potential for a fiscal repositioning.  The rise of the internet, a new venture for many, including independents, will see some new markets and supply systems established, particularly for specialist, different products (food, but also non-food).  Local stores have stood by customers in this crisis and could well be rewarded as it reduces in intensity.  All this should make us ask ourselves: Do we really need to shop and travel (or indeed work) as we did?

The old system and ways of doing things have been exposed as never before. It has required state intervention to prop up supposedly resilient businesses. Why should we value and reward City bankers over “key workers”? We will have to pay for the support and recovery.  It is likely incomes will be squeezed and prices will rise as systems have to build resilience.  We will have to think hard about how we support more people to live “fairly”. A more varied, local food (and non-food) supply might be highly desirable, both for resilience but also consumer demand reasons.  If we are serious about wanting this, then we will need to consider how business support and taxation should be deployed.  Whatever we think of the government’s economic actions, the ability to target spend to achieve outcomes is surely now reestablished.

And yes, business rates as the main form of business taxation should be dead.  The question is what will replace them?

The system we had has got us through the first part of this crisis.  The next part in economic terms is the unravelling of the economy (including much retail) and the price people will have to pay for this.  Then though we have an opportunity to build a system that works for the farmers, producers, shopkeepers and shopworkers we need, as well as for all consumers.  This has to be local and additive to local economics and places and not extractive as we have been used to.  All of us should have to both get used to new ways, but also demand our say in creating them.

We need to change our priorities in retailing and places (towns, high streets etc). Next post I will look at what this could mean and look like for retailing and towns. I will follow that by a closer look at the possible future of the supermarket.

About Leigh Sparks

I am Professor of Retail Studies at the Institute for Retail Studies, University of Stirling, where I research and teach aspects of retailing and retail supply chains, alongside various colleagues. I am Chair of Scotland's Towns Partnership. I am also a Deputy Principal of the University, with responsibility for Education and Students.
This entry was posted in Availability, Community, Consumer Change, Consumer Choice, Consumers, Contactless, Convenience stores, Covid19, Food Retailing, Grocery, Independents, Internet shopping, Local Retailers, Localisation, Non-food retailing, Online Retailing, Panic buying, Producers, Resilience, Retail Change, Retail Sales, Retailers, Small Shops, Supermarket, Suppliers, Supply Chains, Uncategorized and tagged , , , , , , , , , , , , , , , . Bookmark the permalink.

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