UK retail sales surged back almost to pre-coronavirus lockdown levels in June, according to the latest data from The Office for National Statistics (ONS), as non-essential stores in England reopened and gave beleaguered clothing stores a boost.

Today’s ONS data revealed that UK retail sales jumped 13.9% on May figures, smashing far more conservative expectations of an 8% increase.

This built on a rebound of 12.3% month-on-month in May after volumes had contracted a record 18% in April when the lockdown was fully in force. The figures indicated that the retail sector is recovering following the three-month lockdown period and provided a morale boost for the embattled British economy.

Interestingly, the ONS data highlighted an increasing number of shoppers visiting stores in person in June, with the proportion of online spending reducing to 31.8% in the month.

NON-FOOD RECOVERS

June also saw non-food stores - including department stores and clothes outlets - partially recover from strong falls suffered during the lockdown.

A 70% surge in clothing and footwear sales reversed much of their slump in recent months, though the sector remains one of the worst hit with spending 35% below pre-pandemic levels.

Household goods stores also saw strong sales in June, with the furniture and DIY categories in fine fettle. Earlier this week, home improvement retailer Kingfisher (KGF) forecast first-half underlying profit ahead of last year after exceptionally strong demand.

While this growth is amazing news for the retail sector, there is still much debate over what the future holds in this new era of retail operations and consumer behaviour.

BUSIER BY THE WEEK

Lee Lucas, Principal and chief executive of the Fashion Retail Academy, said it is ‘extremely encouraging to see a monthly bounce, reflecting consumers’ eagerness to get back to the high street.

‘Although they are not quite back to pre-pandemic levels, high streets all over the country are getting busier by the week, with shoppers relieved to be able to return to physical stores and make the most of the summer promotions currently on offer.

‘Retailers will be keeping a nervous eye on footfall over the next few weeks to see if compulsory face mask-wearing has any impact.

‘However, it could work in shops’ favour. Compulsory mask-wearing will help entice those customers who are more nervous back to the high street, reassured by the fact they know all shoppers will be taking precautions.’

However, there are real concerns that retail sales could fall away once the government furlough scheme ends in October.

‘The current fundamentals for consumer spending have taken a downturn as a result of coronavirus, and they are likely to remain under pressure in the near term at least,’ said Howard Archer, chief economic adviser to the EY ITEM Club.

‘Many people have already lost their jobs despite the supportive government measures, while others will be worried that they may still end up losing their job once the furlough scheme ends in October.’

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Issue Date: 24 Jul 2020