As UK lockdown measures are relaxed and non-essential high street stores were allowed to reopen on June 15, retail sales have seen a welcome boost. In the highest monthly increase since May 2018, there was a 3.4% boost in sales in June which is a significant improvement on an average decline of 6.4% over the previous three months when shops were forced to close.
This latest snapshot from the British Retail Consortium-KPMG Retail Sales Monitor is a welcome sign of some recovery, however, there are still plenty of challenges ahead for the retail industry and some sectors are faring better than others.
Online sales are still leading the way
Online sales have continued to increase in June, driving the overall growth with support from the reopening of high street stores. Footfall in stores is still significantly lower than pre-coronavirus levels (62% down), although customers are currently spending more on average when they are visiting shops.
Internet sales of non-food items saw an impressive 48.2% increase in June which is significantly higher than the 3.3% increase than occurred in June 2019. The warm weather also benefited food and drink sales as shoppers made the most of it with picnics and home barbecues.
Online shopping may well be the ‘new normal’ going forward as customers have been forced to adapt and many have now embraced new shopping habits.
Fashion sales haven’t rebounded
While online sales have continued to grow, the main sector that is struggling with sales across the board is fashion. While we might have expected to see a resurgence in fashion due to pent-up demand as restrictions ease, this is yet to materialise.
Having seen the reports of shoppers willing to queue to get back into their favourite stores, there’s hope that high street activity will pick up again slowly and cautiously as consumers regain confidence. However, as socialising is still limited and some offices remain closed, sales of clothing, footwear and health and beauty products are likely to continue struggling.
Retail is not out of the woods yet
“Though a month of growth is welcome news, retail is not out of the woods yet,” said BRC chief executive Helen Dickinson. With store closures and job losses happening across the UK, the industry will need continued support from the government in order to recover. Consumer behaviour has changed and the road to recovery will take time.