The share of retail sales that were ‘online’ surged during the early days of the COVID-19 pandemic, as lockdowns were enforced and people opted to buy online rather than in store. At the time, this raised questions about whether this would accelerate the move towards online retail or if it would simply be unwound as economies normalised. With hindsight, we can now see that the uptick caused by the pandemic, has been fully unwound with the share of online retail having reverted to its pre-pandemic trend (i.e., the online share of purchases has settled at a higher level than the pre-pandemic period, but this was to be expected given the trend towards online shopping). UK retail REITs (which reflect demand for high-street retail space) underperformed broader market indices, both in the lead-up to the pandemic and in the early few months of it, as demand for online retail versus high-street shopping increased. However, they appear to have bottomed out over the past two years, coinciding with online sales retreating to the pre-pandemic trend. Of course, further surprises in the growth of online retail could threaten the performance of these indices once again.
Refresh this chart in your browser | Edit the chart in Datastream
The views expressed in this article are the views of the author, not necessarily those of LSEG.
____________________________________________________________
LSEG Datastream
Financial time series database which allows you to identify and examine trends, generate and test ideas and develop viewpoints on the market.
LSEG offers the world’s most comprehensive historical database for numerical macroeconomic and cross-asset financial data which started in the 1950s and has grown into an indispensable resource for financial professionals. Find out more.
