Business & Retail shops still ‘unsure’ as people return slowly for shopping

UK shops have made a promising start to the year as people have returned to high streets up and down the country, however, they are “not out of the woods” just yet, a leading trade association has warned.

According to the latest figures from the British Retail Consortium (BRC), along with KPMG, total sales in Britain increased by 7.3% across the month of April, compared to the same month in 2019, as restrictions eased for non-essential stores under Boris Johnson’s roadmap out of lockdown. This was above the 3-month average growth of 6%.

Due to the turbulence seen in 2020, with retail shops being opened and closed throughout the year in a bid to curb infections, the BRC has compared all 2021 data with pre-pandemic figures.

It said that UK retail sales rose 46.3% on a like-for-like basis from April 2019, when they had already jumped 3.7% from the preceding year. This was thanks to pent-up demand and the shopping experience drawing consumers back into physical stores.

Stores that have closed, are yet to reopen, or are new stores in the last two years, were not included in the like-for-like sales figure, however, all online sales were counted.

In the three months to the end of April, total in-store sales of non-food items fell 30.9%, while total food sales surged by 10.3% as more people are working, and subsequently eating, from home compared to two years ago.

Non-food retail sales jumped by 25.1% on a like-for-like sales basis and 2.4% on a total sales basis over the period, climbing above the average decline of 1.3%. Categories such as jewellery, accessories and footwear all registered triple digit growth.

Due to the turbulence seen in 2020, with retail shops being opened and closed throughout the year in a bid to curb infections, the BRC has compared all 2021 data with pre-pandemic figures. Chart: BRC-KPMG
In the three weeks following the reopening of stores in the UK, non-food sales increased by approximately 25% in comparison to the levels of spending seen during the previous month under lockdown.

In comparison, non-food sales online increased by 57.4% in April, against a growth of 4.3% in April 2019. This, however, fell below the 3-month average of 82.5%.

“It is great to see customers feeling confident visiting shops, a testament to the ongoing investment by retailers in making their stores, warehouses, and deliveries COVID-secure,” Helen Dickinson, chief executive of the British Retail Consortium, said.

“Many fashion retailers saw an uptick in sales, particularly in outerwear and knitwear, as the public braved the cold spring weather for outdoor meeting and dining with friends. Furniture also saw a boost as consumers can once again try before they buy.”

However she warned that sales growth was “fragile”, with high streets still having “a long way to go on the path to recovery”.

She added: “There is little competition for share of spending while parts of hospitality, leisure, and tourism remain restricted and inner cities and town centres continue to perform poorly as many people continue to work from home.

The future of many stores still hangs in the balance as some 530,000 people who work in retail are still on furlough, and business rates relief in England comes to an end in June.

Paul Martin, head of retail at KPMG, said: “Conditions will remain challenging as government support tails away over the summer and interest and repayments on CBILS and bounce back loans will need to start being paid back, alongside deferred rental payments.

“Retailers face an interesting few months as they assess the level at which online shopping falls back and full re-opening of the hospitality sector will likely see a dilution in retail spend in favour of leisure, entertainment and hospitality.

“Retailers will be hoping that with the increasing positive signs of the economy improving, market conditions offer scope to spark a big surge in consumer spending this summer.”

Related posts