COVID-19, the resulting lockdowns and business closures that have affected businesses for the last year have fundamentally reshaped the UK business environment. Stock markets and job loss figures show us the winners and losers, with digital companies shares soaring, whilst hundreds of thousands of retail jobs have been lost, whilst many well-known high-street businesses fell into administration.
Online retailers have many benefits, both during the pandemic and during ‚’normal‚’ trading conditions, but they also have drawbacks. The benefits of online retailers are:
1. Availability of a much wider range of items very quickly (often next day) than is possible in a physical store.
2. Unaffected by lockdowns restrictions
3. Lower cost of entry to market for small retailers
4. Lower prices due to greater efficiencies and lower tax burden
The drawbacks of online retailers are:
1. A consolidated market dominated by multinational corporations over which the government/regulators have limited control.
2. The share of tax that they pay is lower than bricks & mortar retailers.
3. No benefit generated for our local communities.
4. Greater opportunity for tax or regulatory standards evasion due to limited trading operations in the UK.
Although restrictions have had a greater impact on leisure and cultural businesses than on retailers, they are not competing with digital competitors in the same way because most of their businesses are based on experiences. These cannot be replicated digitally in the same way as retail sales can be. Therefore, physical retail is the sector most at risk from the impacts of COVID-19 because of the combination of extended closures and competitors who were unaffected. In order to ensure that the benefits that physical retailers bring to our communities, towns, and cities, are preserved, this challenge must be addressed by levelling the playing field between online and physical retailers.