ONS retail data shows signs of recovery

The value of sales increased by 4.4 per cent and volume sales by 3.6 per cent in July, when compared with the previous month.

The latest Office for National Statistics (ONS) release revealed that when compared with February’s pre-pandemic level, total retail sales were 1.7 per cent and three per cent higher in value and volume terms respectively.

While total retail sales may be recovering in July, the wider economy still entered a technical recession in the second quarter, with the economy shrinking by a further 20.4 per cent from the fall of 2.2 per cent in the first quarter.

Growth in the retail sales industry contributed approximately 5.4 per cent to GDP. The ONS stated that as we see unprecedented changes to the economy, the pandemic has also changed the shape of the retail industry.

“Despite total levels of sales increasing to slightly above pre-pandemic levels, not all retail sectors experienced this bounce back.”

For food and non-store retailing, levels remained higher than before the pandemic, while non-food and fuel sales are still below their pre-pandemic levels.

The monthly growth rates seen in July for non-food at 10 per cent and fuel at 26.2 per cent show some recovery, however, these strong monthly growths are from exceptionally low levels. In July, volume sales within non-food stores were still 6.6 per cent lower than February and for fuel, 11.7 per cent lower than February.

Despite a fall of 3.1 per cent in July for food stores, volume sales were still 2.4 per cent higher than February. The monthly fall in food store sales could be explained by the re-opening of restaurants and bars from 4 July, as consumers’ retail food bills reduced as they began to eat out.

In July, total non-food stores were 6.6 per cent lower than their pre-pandemic levels, mainly because of the larger falls and slower recovery for clothing stores, which were 25.7 per cent lower than February.

Household goods stores and other non-food stores show a sharper rate of recovery from their large falls and are now six per cent and 2.2 per cent respectively above their February levels.

Department stores saw less dramatic falls in March and April, resulting in smaller growths to recovery. Many department stores selling a range of goods including food reported continued trade over the period when many stores temporarily closed. In July, department stores were 5.1 per cent lower than their pre-pandemic levels.

Meanwhile, online retail sales volumes decreased by seven per cent when compared with June.

All online sectors saw a decrease on the month, with large falls in non-food stores. This resulted in a lower proportion of money spent online at 28.9 per cent in July, when compared with June at 31.9 per cent, but was still much higher than February, at 20 per cent.

Helen Dickinson, chief executive of the British Retail Consortium, commented that these results mask a crisis under way in some parts of the retail industry.

"While food and online have shown growth, the hustle and bustle of shoppers and workers has yet to return to major town and city centres, continuing to impact sales significantly in those locations - in-store non-food sales were down over £1.6 billion per week during lockdown and July’s uplift reported by the ONS doesn’t make up for that lost ground."

She added that the survival of many retail businesses hangs in the balance. "Some retailers haven’t been able to pay their rent for the period where they were required to close for our national benefit and numbers of job losses and shop closures are rising - unless another viable solution is found, the government should extend the moratorium on aggressive landlord debt enforcement beyond September.”

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