Retailers may see activity pick up again later this year, depending on store reopenings and the rollout of vaccines in Canada, says Scotiabank’s retail analyst Patricia Baker, but a shift in consumer habits and preferences brought on by the pandemic will likely remain for the long term.
In the latest episode of Pandenomics – our podcast series looking at the impact of COVID-19 on the economy – Baker examines how retailers such as fast fashion chains have struggled during the pandemic while others, such as those selling mattresses, wearable gadgets and groceries, saw a surge in demand in 2020.
Online shopping demand also surged amid restrictions and lockdowns, she added.
“The winners have won because they pivoted very quickly to ensure that they were up and running on home delivery and curbside pickup, which was critically important,” Baker said.
Looking ahead to 2021, the Director of Retailing, Global Equity Research expects it to be “a year of two tales” for the sector.
“The first, maybe, three quarters of the year is still going to be fraught with uncertainty, because we remain under lockdown and we have approval for vaccines, but we do not have the vaccines in the arms of all Canadians,” Baker said during the podcast.
“And until that time, people are going to remain very focused on convenience, health and safety, and will remain cautious. So that's going to impact retail.”
If the federal government reaches its goal of having most Canadians vaccinated by September, then people will feel more comfortable and retail may open up again, she added.
However, the impact of COVID-19 on consumer behaviour and preferences are likely here to stay, which retailers will need to be mindful of, Baker said.
“Coming out of the pandemic, consumers’ behaviours and consumers’ focus on products, etc. have changed dramatically… Consumers are re-evaluating what they need, re-evaluating what is essential and also re-evaluating who they want to do business with. And there's going to be, I believe, a heightened interest in sustainability, a heightened interest in the social good and connection with the community. So, consumers may change who they deal with, how often they deal with (them) and what they purchase. I think there’s going to be a big shift there.”
- Listen to Pandenomics Ep. 9: Preparing for the unpredictable here.
- Listen to Pandenomics Ep. 8: A brighter economic outlook for 2021 here.
- Listen to Pandenomics Ep. 7: Markets recover as COVID cases surge here.
- Listen to Pandenomics Ep. 6: Biden pros, cons for Canada here.
- Listen to Pandenomics Ep. 5: COVID and real estate, Part 2 here.
- Listen to Pandenomics Ep. 4: The COVID housing boom here.
- Listen to Pandenomics Ep. 3: COVID-19 and business here.
- Listen to Pandenomics Ep. 2: COVID-19's impact on jobs here.
- Listen to Pandenomics Ep. 1: COVID-19 and Canada's economy here.