Retailers in the UK suffered a second successive slump in monthly sales during May as the coronavirus lockdown continued to curtail high street shopping.
Figures from the British Retail Consortium (BRC) show total sales fell by 5.9% year-on-year. This was less severe than the 19.1% fall in April, when the lockdown was in full force, but it is the second-largest contraction since the series began in 1995.
Online sales of non-food goods jumped 60.2%, but this was not sufficient to offset the drop in spending on the high street. In-store sales of non-food items declined 50.3% on a total and 21.9% on a like-for-like basis in the three months to May.
BRC’s Chief Executive Helen Dickinson said: “For those shops whose doors remain shuttered, it was once again a tough month and even those who stayed open suffered reduced footfall and huge costs implementing social distancing measures.
“While the month showed record growth in online sales, many retailers will be anxious to see whether demand returns to our high streets when non-essential shops reopen from 15 June.”
She highlighted that weak consumer confidence and social distancing rules are likely to hold back sales. This has led to growing concerns that if government support is withdrawn too quickly, many shops and businesses will collapse.
Meanwhile, grocery retailers continued to benefit from increased consumption at home with food sales growing 8.7% on a like-for-like basis and 5.6% on a total basis over the three months to May.
Susan Barratt, CEO of IGD, commented: “May marks another month of growth for the grocery retailers, with each week’s sales showing significant year-on-year gains, albeit against the backdrop of an increased cost base as a direct consequence of COVID-19.
“UK grocery retailers substantially benefitted from the two bank holidays and the sunniest month on record. This, combined with the start of lockdown easing, has seen more people keen to mark these occasions with BBQs and picnics.”
Echoing the BRC’s retail sales report, Barclaycard data released today showed consumer spending fell 26.7% in May. While people spent 24.5% more at supermarkets, this was not enough to overcome a 36.9% drop in sales of non-essentials.
The provider of half of the nation’s credit and debit card transactions did point to an easing in the declines in some areas. This included eating and drinking, other than grocery shopping, as more restaurants, pubs and cafés adapted to offer delivery and takeaway services.
There was rising sales at sports and outdoor outlets as people bought items to help them exercise while gyms remained closed.
“We are seeing certain sectors start to increase sales as the climate eases and they adapt,” said Esme Harwood, director at Barclaycard. “While the restrictions continue to have a significant impact there are glimmers of hope.”
NAM Implications:
- Given the potential impact of mental lockdown and impact on consumer confidence…
- …anyone not anticipating up to a further 12 tough months for non-food retailers, and hospitality…
- …should re-read this item…
