Rapid spread of the new Covid-19 variant is damaging high street retailers in the valuable week before Christmas

As of Sunday, December 19, there were 82,886 new Omicron cases in the UK, a 72% jump on the 48,071 cases recorded in the previous week.

The Omicron variant has caused concerns amongst people in the UK looking to spend Christmas with their families particularly after last year, with the new variant potentially putting this into jeopardy.

As a result, people have started to be more cautious with in-person Christmas shopping in recent weeks, with high streets emptier than expected. Roughly 25% fewer people were estimated to visit UK retail destinations on Sunday compared to the same date in 2019. However, it was up around 30% on last year.

Despite this, last year retailers were still benefitting from government funds to help alleviate damages caused by the pandemic, whereas now businesses are more vulnerable.

If further lockdown measures are introduced with no government support, we may see more businesses on the high street go out of business, a trend of recent years.

High street retailers forced into early Christmas sales to try to increase demand

Prominent retailers such as Halfords and Harrods have looked to bring forward their Christmas sales in order to entice shoppers back to the high street.

However, it is unlikely to attract hordes of people with the priority for many being to avoid the new variant and spend Christmas with family and friends. Following last year’s restrictions, spending Christmas together is taking precedence over Christmas shopping.

Following the pandemic, many are accustomed to ordering online, so shopping in person is not seen as worth the risk with such an easy alternative.

Although retailers did benefit from increased footfall in November and early December, they will not benefit from a surge of pre-Christmas shopping in the final week, which had been the trend before the pandemic.

This will frustrate retailers who had hoped that after last year there would have been a surge in Christmas shopping for 2021, which now looks relatively muted.

Supermarkets in retail parks preferred to city centres

Most people are still looking to do their Christmas food shopping in person but out-of-town retail parks are being preferred to city-centre stores.

This is due to larger stores with better ventilation, the ease of travelling by car and avoiding busier city centres, which all help to mitigate the risks of catching Covid-19.

Although consumers demonstrate a shift in behaviour, UK supermarkets are unlikely to be affected due to their dominance of the market. Whether consumers order online, use out-of-town retail parks or go to city centres, generally, the demand is going to the same group of firms.