Modest win for retail as sales show partial recovery

Retail sales volumes partially recovered last month, with an increase of 2.1 per cent compared to the 8.2 per cent drop in January, according to the latest ONS retail figures.

The research found that non-food stores provided the largest positive contribution to the monthly growth in February 2021 sales volumes, aided by strong increases of 16.2 per cent and 16.1 per cent in department stores and household goods stores respectively.

ONS said that anecdotal evidence from household goods stores suggested that the monthly growth could be attributed to the purchase of DIY products as consumers continue to improve their homes during lockdown, with retailers also suggesting there was evidence of consumers buying outdoor products earlier in preparation for the easing of lockdown restrictions.

Despite the positive growth in household goods and department stores, overall retail sales were still down by 3.7 per cent on the previous year.

In the three months to February 2021, retail sales volume fell by 6.3 per cent when compared with the previous three months, with strong declines in both clothing stores and other non-food stores.

Clothing retailers saw the biggest drop in sales volumes of 50.4 per cent compared to February 2020.

Online spend increased by 36.1 per cent in February 2021, the highest on record. This compares with 35.2 per cent in January 2021 and 20 per cent reported in February 2020.

“Retail sales fell for the second consecutive month in February, and non-food stores saw their fourteenth month of decline with a massive 25 per cent drop,” said Helen Dickinson, chief executive of the British Retail Consortium (BRC.) “UK stores have now lost a whopping £27 billion from lost sales during the three lockdowns. This is already impacting retail employment, with 67,000 retail jobs lost between December 2019 and 2020.

She added: “While the Prime Minister’s roadmap helped boost spending on back-to-school items, consumer demand remained weak overall. Meanwhile, online sales remained strong, providing a lifeline for customers, and rewarding those retailers who have adapted and grown their digital offering over the last 12 months.”

Commenting on the ONS figures, Karen Johnson, head of retail and wholesale at Barclays Corporate Banking said: “February was clearly a month too early to put a spring in the step of consumer spending with only modest growth in sales recorded for the period. The recent publication of the ‘road out of lockdown’, alongside the progress made in the UK’s vaccination efforts, still needs more time to have the impact on consumer spending that we all eagerly await.”

But she said that any growth in the current circumstances, regardless of how modest, offers “a glimmer of hope to the sector.”

Lynda Petherick, head of retail at Accenture UK and Ireland, said: “A dire January capped off what’s been a rocky year for retailers, to put it mildly. Finally though, thanks in large part to the impressive vaccine rollout so far, February’s figures show early signs that there are brighter days ahead for retailers. However, we are still a long way off from recovering to numbers compared to this time last year. With the April reopening date for non-essential retail still on the cards, retailers will be planning how they can make the most of pent-up consumer demand this spring and beyond.”

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