UK retail sales begin recovery but normality still elusive

By

Sandra Halliday

Published
Aug 11, 2020

UK consumer spending is getting close to pre-pandemic levels as sunshine and restaurant/pub reopenings boost the overall consumer environment, new figures show. But the country is still expected to see its deepest recession in a century with the GDP figures due to be confirmed this week.

The monthly retail figures from the British Retail Consortium (BRC) and accountancy firm KPMG showed sales up 3.2% month-on-month in July. They rose 4.3% like-for-like compared to July 2019.

But people weren’t buying fashion as a priority. Food, furniture and homeware sales were key instead.

BRC chief executive Helen Dickinson said: “Many shops, particularly in fashion, jewellery and beauty, are still struggling to survive.”

That view was supported by the latest monthly figures from Barclaycard, which (based on overall consumer spending rather than just retail sales) showed a drop of 2.6% year-on-year in July. Admittedly, it was the smallest fall since lockdown began as Britons spent more on non-essential items.

Spending on non-essentials fell ‘only’ 4.7% year-on-year, but this was a significant improvement from the 22.3% decline seen in June, with shopping locally and buying takeaways meals contributing to this recovery.

And again in this report, fashion wasn’t among the ‘winner’ categories. However, sports and outdoor stores saw strong uplifts, rising 27.7%, as warmer weather and the start of the school summer holidays in England and Wales encouraged more people to spend time outside. Pharmacy, health and beauty shops were up 4%, a notable increase from the 33% drop seen in June, as hairdressers, nail bars and beauty salons started to reopen their doors.
 
Consumers also seem more keen to visit physical shops. Some 37% of UK adults are now unconcerned about visiting stores. Perhaps unexpectedly, shoppers aged over 55 are most likely to say they aren’t concerned, with 18-34 year-olds the least likely to feel this way. Of those who are comfortable heading in-store, 46% are reassured by the requirement to wear face coverings and 45% by the presence of antibacterial hand gel at many retail entrances.