Stores still struggling despite retail sales rise.
Covering the four weeks 2 – 29 August 2020
* Note 2020 is a 53-week year in the ONS calendar: as a result of the extra week in January 2020, the comparable 2019 performances cited here may differ from those published last year, due to the one-week shift in the comparison.
Helen Dickinson OBE, Chief Executive | British Retail Consortium
“Despite another month of growth in August, retail sales remain down overall since the start of the pandemic. Remote working has continued to help sales in home goods, such as food, computing, furniture and TVs. Lockdown also appears to have permanently changed some consumers’ shopping habits, with online sales continuing to boom despite shops reopening in June. Meanwhile, city centre retailers continue to be devastated by low footfall and poor sales, as office workers stayed away for yet another month.
“Many retailers are continuing to struggle, particularly those in clothing, footwear and beauty, that are reliant on high footfall locations. With rents accumulating, and the September quarter payment date fast approaching, many retailers are hanging on by a thread. Unless businesses and government can successfully persuade office workers back into city and town centres, some high street retailers will be unable to afford their fixed costs. Government will need to act fast or September will see more shops close and more job losses realised.”
Paul Martin, UK Head of Retail | KPMG
“The retail sector continued to show promising signs of recovery in August, with like-for-like retail sales up 4.7% compared to last year. Whilst welcome news, the coming months are far from problem free, with economic uncertainties – including the unwinding of the furlough scheme – likely to leave many consumers thinking carefully about their spending priorities.
“We continue to experience mixed fortunes and not all retailers are where they should be at this point in the year. Fashion sales did start to rebound somewhat – at least online – although this was mainly driven by children’s back-to-school purchases. Likewise, the focus on home-related products, including furniture and computing equipment, continued – no doubt aided by many consumers remaining mostly at home.
“The online channel remains prominent, with penetration rates still high at 39.3% for non-food. Indeed, the vast majority of online categories realised significant growth in August. Clearly retailers have some serious thinking to do around what the future of the industry is going to be exactly. While the overall online penetration rate has declined in recent months, the significant acceleration of the channel is here to stay. With this in mind, retailers need to focus on the cost of doing business, as online is generally more expensive to operate.”
Food & Drink sector performance | Susan Barratt, CEO | IGD
“Following further easing of lockdown restrictions, consumer spending on food continues to return to more usual patterns. Grocery sales put in a solid performance compared to August 2019, despite a much cooler summer bank holiday at the end of the month for English and Welsh shoppers. The ongoing normalisation of consumer spending has also been helped by the government’s Eat Out to Help Out scheme, which gave the out-of-home sector a significant and much-needed boost.
“The Eat Out to Help Out scheme and the holiday season helped IGD’s Shopper Confidence Index remain stable. However, shoppers have varying experiences and confidence is more subdued among lower socio-economic groups and younger shoppers (aged 18-34), with these consumers traditionally impacted more during an economic downturn.”
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