Retail sales up in June but crisis ‘far from over’

UK retailers saw sales increase 3.4 per cent in June in the first evidence of growth on the High Street since the Coronavirus began.

Data from the British Retail Consortium (BRC) and KPMG retail sales monitor for the four weeks from 31 May to 4 July shows a rise in sales compared to a decrease of 1.6 per cent in June, marking the highest increase since May 2018 as shoppers returned to stores following the lifting of lockdown restrictions.

The figures were also above the three-month average decline of 6.4 per cent and the 12 months average decline of 2.1 per cent.

In June, UK retail sales increased 10.9 per cent on a like-for-like basis from June 2019, when they had decreased 2.2 per cent from the preceding year, However, this figure was primarily driven by online sales as the June like-for-like figure have been measured excluding temporarily closed stores but including online sales.

Online non-food sales increased by 48.2 per cent in June, against a growth of 3.3 per cent in June 2019. This is well above the 12-month average growth of 17.1 per cent.

Non-food online penetration rate increased from 33.1 per cent in June 2019 to 50.7 per cent this June.

Computing, furniture and home improvement all continued perform well as the public invested in home comforts and remote working. However, while categories such as food performed strongly, not all retailers can breathe a sigh of relief, with clothing, footwear, and health & beauty still struggling.

Over the three months to June, in-store sales of non-food items declined 46.8 per cent on a total and 11.3 per cent on a like-for-like basis. This is worse than the 12-month total average decline of 16.5 per cent. For June, the like-for-like excluding temporarily closed stores remained in decline.

Over the three months to June, food sales increased 7.3 per cent on a like-for-like basis and 3.8 per cent on a Total basis. This is higher than the 12-month total average growth of 2.7 per cent. For the month of June, food was in growth year-on-year.

Helen Dickinson OBE, chief executive of the British Retail Consortium said: “June finally saw a return to growth in total sales, primarily driven by online as a result of lockdown measures being eased and pent up demand being released. Despite footfall still being well below pre-coronavirus levels, average spend was up as consumers made the most of their occasional shopping trips.

She explained:“Though a month of growth is welcome news, retail is not out of the woods yet. The pandemic continues to pose huge challenges to the industry, with ongoing stores closures and job losses across the UK. The reopening of shops is an important step on the road to recovery, but with months of rent building up, many shops will be forced to close unless action is taken before the next Quarter Rent Day."

"The Government must remain open to further action to boost consumer demand and should take steps to support with rent costs or the industry could suffer thousands of avoidable job losses," added Dickinson.

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