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How is COVID-19 impacting retail construction projects?

Written by Jenna Dalton | Apr 7, 2021 11:00:00 PM

Retail was one of the hardest-hit sectors by the pandemic and almost overnight became unrecognisable. With several household names announcing store closures and potential redundancies there is a concern that retail will struggle to recover. Whilst the reopening of the UK high-streets back in summer 2020 saw some reversal of the damage done by lockdown, the outlook still remains uncertain.

In 2019 there were over 306,600 retail outlets across the UK with 18.3% of sales being done online in quarter 3 of 2019. However, since the beginning of lockdown the number of online sales has nearly doubled reaching 26.9% in quarter 3 of 2020.

It is evident that the digital landscape is evolving at a rapid rate for retailers as the demand for online sales continues to increase. In order to remain competitive, retail businesses are rationalising their estates as in-store sales volumes decrease and estate costs rise.

COVID-19 has only accelerated the movement towards virtual stores. However, it is unlikely that online sales will completely replace the need to have a physical shop.

Construction works are still ongoing in retail, although the types of projects and the areas performing well has changed. The value of retail projects starting on-site during quarter 3, 2020, totalled £346 million; a decline of 22% when compared to 2019. Despite this, there were two areas within the sector that achieved growth: supermarkets (accounting for 52% of projects in October 2020) and shopping centres (9%).

“The safety and well-being of customers will be at the forefront for retailers. It will be challenging to encourage people to visit stores whilst the pandemic continues to pose a threat.

If the UK high-street is to fully recover, retailers will need to consider their in-store experience as well as their online presence to attract more customers.

COVID has exposed weakness in supply chains and e-commerce performance for some businesses. In order to remain competitive, some retailers are making improvements to their storage facilities as well as altering their warehouses to better suit the needs of online sales.”

Martin Cox, Director