Despite non-essential shops remaining closed, retail sales bounced back to growth last month as people prepared for the reopening of schools and increased spending on home improvement products.
The BRC-KPMG Retail Sales Monitor for February revealed that total UK sales increased by 1% against the same month last year. This was a sharp reverse on the 1.3% contraction in January and comes after surging online sales continued to help off-set the temporary closure of most non-food stores.
With bumper sales in supermarkets, food sales remained strong. Meanwhile, the BRC suggested that the Prime Minister’s roadmap to reopening prompted a burst in spending on non-food items, such as school uniforms, furniture and home accessories. However, despite strong online growth, non-food sales were still down year-on-year as clothing and health & beauty categories continue to suffer from the Lockdown.
Retailers across the country are pinning their hopes on consumers quickly returning to the high street when they are allowed to restart trading on 12 April.
“While the uptick in sales is encouraging, many retailers are concerned about the months ahead,” said BRC Chief Executive Helen Dickinson. “Many retail businesses will be hoping that customers will return to shops, and have spent hundreds of millions on making their premises Covid-secure, but previous reopenings have shown that demand can be slow to come back.”
Paul Martin, UK head of retail at KPMG, also warned that high street retailers are likely to continue to endure “incredibly challenging conditions as they face subdued demand, thinner margins and rising logistics costs, alongside the accelerated structural changes to the sector”.
He added: “All hopes will be pinned on consumers wanting to break free from home to browse the stores that have been out of bounds for months.”
Separate figures from Barclaycard on wider consumer spending painted a more disappointing picture, with a decline of 13.8%. Hospitality and leisure firms were, as to be expected the biggest losers, with fuel sales also down heavily as travel restrictions and working from home took their toll.
However, there was strong demand in some areas such as food & drink specialists and takeaways, and for digital subscriptions.
NAM Implications:
- For an update on the ability to return to ’normal’ retailing…
- …why not take a mid-week stroll down any gap-toothed High Street?
- Any return will be gradual, at best…
- …and any consumers that make the trip will be super-savvy…
- …and very demanding.
- Time for real-world ‘normality’, despite assurances.
