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After a difficult February, the high street in the United Kingdom is facing headwinds.

Retail in the United Kingdom has improved to some degree.

In February, UK retail sales increased by 2.1%, despite the fact that it was yet another difficult month for the high street. These latest figures show only a partial recovery from January’s surprisingly strong 8.2% drop, and they confirm what credit card and footfall data have been indicating in recent weeks. Clothing stores have had an especially difficult time, with sales just half of what they were before the pandemic. This corresponds to inflation data published earlier this week, which revealed that fashion retailers cut prices even further in February after making big sales in January.

Of course, with the nation still in lockdown, none of this is shocking, and it’s worth noting that total sales are only down 4% from pre-virus peaks, which is a significant improvement over last spring. As a result of previous lockdowns, we should expect sales to rebound to – or surpass – pre-virus levels within weeks of the shops reopening, which is currently scheduled for April 12th.

The sector is facing two headwinds.

Having said that, we assume the sector will face two big headwinds in the coming months. To begin with, while there is likely to be some pent-up demand released as a result of recent savings, it is predictably likely to support services rather than products. This means that the uptick in demand for items like household goods will not last until the economy has completely recovered. Second, it goes without saying that the shift from physical to online retail will not be fully reversed. This is a tale that started long before the pandemic and has only been hastened by lockdowns.

Unfortunately, the combination of these two factors suggests that conventional high-street retailers are in for another tough stretch. Since many are considered to be behind on rent payments due to the pandemic, these companies will be vulnerable when support measures such as the commercial eviction ban are lifted later this year. Further signs of restructuring on the high street are therefore likely in the coming months, potentially leading to higher unemployment in the market.