Despite continued weakness on the High Street, retail sales increased 6.1% last month on a like-for-like basis against a 1.3% decline in September 2019.
The figures from the British Retail Consortium show that food sales grew by 5.1% on a like-for-like basis over the three months to September as supermarkets continued to benefit from increased consumption at home.
Non-food retail sales were also up in the period, rising by 5.2% on a like-for-like basis. However, this was driven by the online channel where non-food sales increased by 36.7% in September compared to further declines in bricks & mortar stores.
The non-food online penetration rate now stands at 40.1% compared to 30.8% a year ago.
Whist September saw a significant improvement in retail sales growth, the BRC noted that sales over the last six months are still down on the previous year. Tighter coronavirus restrictions have continued to hold back clothing and footwear sales, whilst sales of electronics, household goods and home office products have remained high as the working from home trend looked set to continue for the foreseeable future.
BRC Chief Executive Helen Dickinson commented: “September sales have given retailers early signs that consumers are starting their Christmas shopping earlier this year, which retailers are encouraging their customers to do in order to manage demand at Christmas and keep people safe. However, store-based sales, excluding food, are still in double-digit decline.
“The industry is beginning to recover, however, forced store or warehouse closures during any future lockdowns could put paid to this progress.”
Paul Martin, UK Head of Retail at KPMG, added: “As we enter the all-important ‘golden quarter’ – when many retailers make the majority of their annual revenue – the fight for survival couldn’t be more intense. Close attention has to be paid to how players choose to tackle key events, like Black Friday, within a consumer landscape that has changed entirely.”
Separate data on UK retail footfall shows there was drop of 0.3% last week from the previous seven days. The figures from Springboard reveal that footfall rose marginally in high streets and shopping centres where there were respective uplifts of 0.1% and by 0.4%. However, retail parks saw a decline of 1.6%.
Springboard’s data suggests that the impact of the government’s 10pm curfew has been relatively short-lived, with high street footfall over the evening period partially bouncing back from a double-digit decline seen in the previous week. High street footfall between 7pm and 11pm rose by 5.8% compared to a 12.7% decline in the previous week. Meanwhile, post 11pm high street footfall only fell by 0.4% compared to a 26.4% drop in the previous seven days.
Springboard’s figures also show there was a slight strengthening of the annual result with footfall improving marginally to a year-on-year decline of 30.9% across all retail destinations.
Diane Wehrle, insights director at Springboard, said: “Consumers appear to have adapted their behaviour to accommodate the 10pm closure of hospitality. Last week – the second full week since the introduction of the curfew – the overall UK result was marginal. However, our data indicates that there appears to be a north-south divide in terms of night-time footfall bounce back, with southern areas of the UK recording rises in footfall post 11pm whilst there are noticeable declines in the Midlands and North where a number of towns have more severe restrictions in place. The exception to this is Scotland, where footfall rose post 11pm.”
NAM Implications:
- Any supplier wanting to work with the lockdown situation…
- …has to make some assumptions re what affects their prospects i.e.:
- Homeworking at 25%of total, minimum.
- Online of 50% or more of all retail sales.
- Hospitality drop of 30% minimum.
- Travel retail (commute, business and tourism) down no more than 25%, hopefully.
- …or take the risk of awaiting results…
