What: Shanghai’s current lockdown will eventually end but a new outbreak in Beijing and no end to the country’s rigid pandemic strategy suggest retail disruptions are likely elsewhere.

Why is it important: People are feeling both weary and anxious from a lockdown that was initially slated to last just four days. More frustrating for some than the inability to leave home for weeks on end has been the breakdown of logistics and delivery services, leaving people struggling to access food, medicine, and basic necessities. In such an environment, the thought of shopping for fashion has either been impossible or undesirable for many residents.

With consumer spending down, retailers are feeling the pinch. In March, which coincided with a week-long lockdown in China’s tech capital Shenzhen, there was a decline in national retail sales of 3.5% compared to a year earlier. The decline is likely to be even more apparent in the soon-to-be-released April figures as tourists who usually flock to Shanghai from around the country to shop for fashion and other discretionary goods have been unable to do so.

The world’s largest luxury conglomerates and brands reported that the Shanghai lockdown’s closure of stores had dented sales in their China units, though they expect the impact to be short-lived.

Prior to the new round of lockdowns, Euromonitor data showed China’s personal luxury market reached a market value 90.76% higher in 2021 than pre-pandemic levels in 2019, boosted by restored spending from luxury consumers unable to shop abroad, with additional growth of 14.67% tipped for 2022.

If Shanghai’s lockdown lasts for two months, and other large cities are also affected, China’s 2022 GDP growth would slow to 3.8%, and in a worst-case scenario where the economy suffers a similar shock to that experienced in the first quarter of 2020, it would grow by only 1.3% this year.

China’s ‘Zero-Covid’ policy poses disruption to luxury