NEWS14 May 2020

Retail sales see biggest fall on record as online purchases increase

Covid-19 News Retail UK

UK – Retail sales registered their biggest fall in a single month in April, but online sales are up by more than a quarter during the Covid-19 lockdown, two studies show.

Shoppers retail floor_crop

BRC and KPMG’s retail sales monitor showed a 19.1% decreases in sales in April 2020, compared with a 2.4% increase in April last year.

This was the biggest fall for a single month since the monitor started in January 1995.

The monitor also found that retail sales fell on average by 7.5% over the past three months and 2.3% over the past year – both also record declines.

But the monitor found that when like-for-like sales were analysed – excluding those stores closed in the lockdown – retail sales increased 5.7% in April compared with the same month in 2019.

The monitor suggested this was mainly driven by a rise in online sales.

Helen Dickinson, chief executive of the British Retail Consortium, said: “While retailers have a lifeline through various government loans and support, they need to know this will continue beyond the current deadlines.

“Government should also step in to support on rents for those retailers still facing rent costs, despite little or no sales. Without this, businesses may be forced to close – threatening jobs and further harming local communities.”

The latest IMRG Capgemini online retail index also found that online sales soared by 23.8% year-on-year in April, which was a 10-year high.

The index found that it was multichannel retailers who benefitted most, with sales up more than 35% compared with online-only retailers’ more modest increase of 8.3%.

April also saw gardening sales increase by an unprecedented 288% year-on-year, the index found.

Electrical sales were up 102%, and health and beauty increased by 82%.

But clothing was down 23.8% in April compared to the same month in 2019, and footwear and menswear sales were particularly poor, down 31.1% and 33.5% respectively.

Lucy Gibbs, managing consultant for retail insight at Capgemini, said: “Covid-19 has reshaped consumer spending patterns and shopping habits, which has been accentuated by the significant online growth in April.

“However, despite the positive figures, it begs the question whether this is enough to make up for the full impact of Covid-19 performance particularly for the fashion sector which is still losing out as customers are purchasing for new environments rather than fashion.

“Retailers will need to listen to their customers, and find new ways to become increasingly transparent, flexible and innovative in order to navigate the rocky and uncertain road ahead.”