Answer to Question #150405 in Microeconomics for Mo

Question

Describe how retail sales have been affected by the lockdown caused by the corona virus during the period from February 2020 to July 2020 and explain why the UK has experienced ‘the strongest monthly growth in business activity for five years’ during the month of June.

Answer 1

The global lockdown has really affected the supply, demand and daily business operations of the retail sector. Non-essential businesses we re forced to shut down while the essential businesses activities such hospitals, food retailers were allowed to operate under restrictions comprising of labor supply shortages. Some retailers had difficult in running internet sales due to concerns of safe operations. the lockdown forced majority of the people to work from home and thus they could take their meals at the comfort of their homes. This made the demand of food eateries to reduce therefore affecting the retail sector.

Uk experienced high performance in the month of June than that recorded in the other months for the past five years. The level of consumer spending went high leading to growth of business activities. The UK shoppers abandoned online shopping to physical stores in fear and sense of crisis around retailing during lockdown. The re-opening of businesses that had shut down temporarily led to increase in sales thus enhancing business growth.