Covid-19 could push up prices for online shoppers, experts say
Online shoppers could face more expensive deliveries as e-commerce retailers grapple with mounting costs due to soaring demand during the coronavirus pandemic, according to the latest research.
The spike in demand for home deliveries during the coronavirus pandemic has increased costs for retailers, which will eventually be shared with consumers, experts said.
Online sales surged during the coronavirus lockdown as non-essential stores closed, accelerating the shift to internet shopping.
Online shopping in June was 53.6 per cent higher than in February – just before the pandemic hit the UK.
A survey by Colliers International found that 76 per cent of tenants, landlords and real estate professionals believe the Covid-19 crisis has accelerated customers being affected by higher prices in the future.
The rise will be driven by sustainability concerns, supply and demand and logistic chain factors.
However Colliers said the rise will not happen in the near-term as retailers battle to defend their market share.
Len Rosso, Head of Industrial and Logistics at Colliers International commented: “There is currently a balancing act for retailers and logistics operators between increasing costs, meeting customer expectations and environmental issues which will become more pressurised as the number of people shopping online increases.
“There is no denying that COVID-19 has accelerated consumer preference for e-tailing, both from a convenience and safety perspective.”
The survey also found that 86 per cent of respondents did not believe there is enough warehouse and logistics development land to accommodate the growth of last mile deliveries in the UK.
“Finding the right warehouse stock in the right location is one of the biggest challenges for occupiers, particularly nowadays as season peaks are becoming more unpredictable,” Andrea Ferranti, head of industrial and logistics research at Colliers International, added.
“This supply and demand issue, coupled with spiralling delivery costs and sustainability pressures will undoubtedly have a domino effect, increasing the cost of items for the end-user: the customer. The million dollar question that remains is whether the consumer be willing to pay extra for their home deliveries?”