Commenting on the latest ONS retail sales figures for March and GfK’s consumer confidence figures for April, Paul Martin, UK head of retail at KPMG, said.
“The impact of COVID-19 on the retail industry is ringing painfully clear in the latest ONS retail sales figures, and indeed in the latest consumer confidence survey by GfK. The unprecedented situation and the nation’s subsequent lockdown has unsurprisingly seen sales plummet rapidly by historic rates, whilst consumer confidence is teetering above the historic lows recorded during the most recent financial crisis. It’s important to remember that March retail sales figures only capture a small proportion of the lock down – coming in place on March 23rd - but what is clear is that sales of non-essentials had evaporated well before the restrictions came into place, as anxiety about the virus started to build.
“Grocers and online retailers may appear beneficiaries with our high streets currently void of all footfall, but the surges here aren’t likely to be enough to make up for the lost ground across the sector more broadly. Added to that, a surge in sales hasn’t necessarily meant a rise in profits, with added costs associated with meeting demand in this climate. If considering the non-essential sales missed due to lock-down, it’s likely these will be lost forever and in many cases retailers will be frantically writing off stock. Only those deemed ‘essential’ currently, or those with robust online operations, are able to adapt to this current climate. Those that can’t, are naturally fixated on when the restrictions will lift.
“If confidence deteriorates further, it’s likely retail spend will be far from anyone’s mind when things do return to the ‘new normal’. There is little question that the retail landscape has changed permanently, but the key question will be: which retailers will still be fit for purpose in the next chapter?”
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