• Global retail sales volumes will grow by 3%, but still fall 2% short of 2019 levels.

• Asia will be the only region to see consumer spending in 2021 exceed pre-pandemic levels, gaining even more importance as a consumer market.

• Online retail will increase its share of total sales but face headwinds in the form of regulatory scrutiny, taxes and cyber threats.

Our new report “Industries in 2021,” forecasting growth and assessing key risks in the consumer and retail sector for 2021, predicts that retail sales volumes will grow by 3% after a 4.3% decline in 2020. However, volumes will trail 2019 levels, reflecting high unemployment and uncertain incomes. Consumer spending will recover the fastest in Asia and exceed estimates for 2019. Western Europe and North America will have to wait another year.

Footfall around real-world stores will not return to 2019 levels in 2021, leading to continued store closures as well as bankruptcies. Some that emerge from bankruptcy in 2020 will turn into zombie companies amid slowdown in consumer spending. The outlook for retail employment remains dim as new jobs in warehousing and delivery services will fail to offset the loss of jobs in physical retail. 

Online retail will continue to increase its share in total sales, but it will face headwinds amid increased regulatory scrutiny and cyber threats. Cash-strapped governments will also be keen to raise digital taxes that are likely to exacerbate international tensions. 

“After a year of unprecedented challenges, 2021 will offer limited relief to the consumer and retail sector. Uncertainty over economic recovery and the course of the pandemic will see consumers continue to cut back on spending. Meanwhile, price competition and the need to invest in new technologies and logistics will hurt bottom lines of retailers, both online and offline.”

BARSALI BHATTACHARYYA, MANAGER OF INDUSTRY BRIEFING AT THE ECONOMIST INTELLIGENCE UNIT

Price and convenience will be key considerations for consumers in 2021, which bodes well for one-stop-shopping destinations offering competitive pricing, including online marketplaces (such as Tmall, Shopee or Amazon) as well as real-world superstores (such as Walmart or Costco). Use of contactless technology, which allows consumers to pay at stores without queuing up at checkout counters, will become more widespread among physical retailers.

Download the full report “Industries in 2021“