The impact of lockdown and the Coronavirus has caused unprecedented economic uncertainty and turmoil, with most of the world’s major economies contracting over the lockdown period. However, looking at the economy as a whole distorts the fact that several sectors have actually been largely unaffected, or have in reality seen a surge in demand as consumer habits are changed by the pandemic and pre-existing trends are accelerated. With this in mind, we take a look at some of the economic winners and losers of the pandemic.
Winners:
Online retailers and technology giants:
Amazon saw their revenues increase a whopping 40% in the period of April to June, netting over $5 bn – the largest profit since the company’s founding in 1994. Facebook’s platforms (including Whatsapp and Instagram) saw a 15% increase in usage, coupled with an 11% rise in revenue. Apple saw an 11% year-on-year increase in profits, driven by home workers upgrading their technology to partake in video conferencing, opting to buy iPads and Macs. Google also made slightly increased profits year on year, however overall the picture was more mixed as companies reduced their ad spending over lockdown.
It was not just multinationals and tech giants that saw the lockdown boom, many national and regional firms with e-Commerce and online ordering facilities saw a sharp rise in profits as customers move towards purchasing online. This trend shows no sign of slowing down, so make sure you don’t miss out on potential sales, take a look at our great eCommerce payment options.
British tourism:
As the air corridor scheme begins to suffer major setbacks with Spain and Luxembourg having their quarantine free status revoked with only a few hours’ notice, many holidaymakers are booking staycations in the UK as an alternative. It was reported that the day the rules regarding Spain were changed, campsites saw a surge in demand with bookings websites Pitchup and Camspites.co.uk both reporting record reservations – 6,100 for Pitchup on Sunday alone. While tourism ground to a standstill in the lockdown period, the bounce back is in full swing and many enterprising farmers are converting their fields into impromptu campsites.
The trend is mirrored for B&Bs and cottage rentals, with Skye’s Holiday Cottages reporting a 50% year on year increase in booking. Hotels too have seen a bounce back, as people opt for shorter city breaks rather than the usual extended several week summer holiday. Bournemouth, Scarborough, Newquay and Torquay are some of the destinations that are benefitting from this staycation boom, but if you are interested in discovering more great destinations, check out our guide to staycations
Takeaways:
Over the lockdown period takeaways saw a massive increase in sales and became the fastest growing sector in UK in 2020. The popularity of delivery and click and collect and the lack of competition from restaurants have fuelled this growth, and demand is expected to remain strong even after lockdown restrictions are fully eased.
Losers:
Pubs & Restaurants: It is estimated £30bn was wiped off the sales of pubs, restaurants, and hotels during lockdown. UK hospitality revenues plummeted 87% between April and June compared to the previous year. A number of restaurant chains such as Frankie and Benny’s, Carluccio’s, Zizzi, and Pret A Manger have all reported they will be closing stores. However, it is hoped that the high profile ‘Eat Out to Help Out’ scheme initiated by Chancellor Rishi Sunak will provide some relief and turn around the flagging restaurant trade.
Airbnb: While hotels and campsites may end up as winners, for accommodation rental site Airbnb the picture has been somewhat bleaker. Dependent as it is on international travel, and with hosts operating independently meaning that little government assistance is forthcoming, revenues have plummeted and plans to public have had to be postponed.
Primark: The fashion retailer had no eCommerce or online retailing presence, so once its brick and mortar stores were closed during lockdown revenues plummeted to near zero. This is a cautionary tale about diversifying your payment streams – once again highlighting the importance of eCommerce and online retailing.
In conclusion…
While COVID19 has undoubtedly had a severe impact on many sectors of the economy, the picture remains mixed and is constantly changing. It is likely many industries will swiftly bounce back, and measures put in place by the government may supplement missing sales. The only way to weather future economic uncertainty is to ensure your business is adaptable as possible, and this includes diversifying the way you take payments. Whether in cash, via card or through eCommerce, be sure to check out our great range of payment solutions, and to check back for further industry news.
