Global retail sales are expected to drop by $2.1 trillion in 2020, according to a recent forecast from research and consulting firm Forrester. Offline non-grocery retail will contract by 20% while e-commerce sales will remain flat, resulting in a 9.6% overall decline.
“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,” he continued. “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.”
Forrester expects that it will take four years for retailer to reach pre-pandemic sales again.
Retail sales declines will vary by region, owing to regional differences and being at different stages of the pandemic.
North America is expected to see retail sales drop from $3.9 trillion in 2019 to $3.5 trillion in 2020. The US will see sales decline by 9.1% and $320 billion in 2020; Canada will see an expected decline of 7.7% and $25 billion.
Europe (UK, Germany, France, Italy, Spain) is projected to see a decline of €260 billion from €2.3 trillion in 2019, a 10.4% fall. The UK will see an 11.4% drop, Germany’s retail sales will fall 10%, and France’s retail sales will fall by 9.5%.
Asia-Pacific’s sales losses are predicted to fall by $767 billion in 2020, declining by 10% from the $7.7 trillion recorded in 2019. China will be hit hardest, having recorded retail sales losses of $192 billion in January and February alone.
Latin America, meanwhile, will see retail sales shrink by an expected 6.8%, falling from approximately $900 billion to approximately $800 billion.