Retail sales drop as hospitality opens

Retail sales volumes dropped by 1.4 per cent between April and May 2021, according to ONS data.

Despite the monthly decline across the period, average sales numbers were still 7.7. per cent higher than in March. They were also 9.1 per cent higher than in February 2020.

The largest contribution to the monthly decline in May came from food stores where sales volumes fell by 5.7 per cent.

ONS said that anecdotal evidence suggests the easting of hospitality restrictions had an impact on sales as people returned to eating and drinking at restaurants and bars.

Non-food stores reported a 2.3 per cent increase in monthly sales volumes in May 2021 with household goods stores (for example, hardware and furniture stores) and “other” non-food stores reporting the largest growth of 9 per cent and 7.7 per cent respectively.

The significant increase in sales volumes in April, followed by a relatively small fall in May, has resulted in the volume of sales for the three months to May 2021 being 8.3 per cent higher than in the previous three months. There was strong growth in automotive fuel sales and non-food retailers of 19.3 per cent and 17.8 per cent respectively.

The proportion of online retail sales conducted remains substantially higher than before the pandemic, but in May all retail sectors, with the exception of food stores, reported a fall in their proportions of online sales as consumers returned to physical stores; the total proportion of sales online decreased to 28.5 per cent in May 2021, down from 29.8 per cent in April 2021.

In comparison with February 2020, the value of total online retail sales in May 2021 was 58.8 per cent higher, whereas in-store sales were 1.3 per cent lower.

“The third month of rising sales will be welcomed by retailers who are still recovering from months of lockdown during which many were unable to open stores,” said Helen Dickinson, chief executive of the BRC. “The reopening of hospitality provided additional impetus for many of us to hit the streets, particularly as the summer weather begun to kick in. Retailers reported an increase in purchasing over browsing, suggesting shopping trips were becoming more purposeful.”

Dickinson added: “Challenges remain. Many retailers built up considerable debt, including from rents, during the periods of lockdown, and will be relying on continued consumer demand to trade their way out. Those based in larger cities have also been hardest hit by the fall in footfall, as many city workers continue to work from home."

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