UK retailers teeter on cliff edge as coronavirus lockdown kicks in

October saw another month of strong UK retail sales growth, with food, gifts and loungewear high on peoples’ shopping lists.

According to research by the BRC and KPMG, on a total basis, sales increased by 4.9% in October, against a decline of 0.3% in October 2019.

Tightening restrictions across the UK and speculation towards the end of the month of an England wide coronavirus lockdown prompted customers to stock up on home comforts and food supplies.

The disparity between online and in-store non-food sales widened, with the highest online penetration rate since June. Non-food stores once again experienced double digit decline due to low footfall as more office workers returned to home working.

However, the aforementioned lockdown, which started on Thursday last week, leaves UK retailers teetering on a cliff edge, argues BRC Chief Executive, Helen Dickinson.

“During an incredibly challenging year for the industry, many retailers had finally thought that they were finding their footing. The new lockdown in England will now throw away this progress as we enter the crucial Christmas trading period and we estimate that £2 billion of sales per week will be lost this month,” she says.

“It is therefore vital that retailers are able to trade from 3rd December and we are asking government to urgently provide clarity about the criteria for reopening and to ensure that affected businesses are supported in the coming months.”

Don Williams, Retail Partner at KPMG, comments: “Online sales remain high and are set to grow further during Black Friday and lockdown. Not all retailers are in a position to take advantage of this shift in customer behaviour, which has been accelerated by circumstance and for many is now both choice and habit.”

He adds: “Some retailers will thrive in the new environment, others will find it bleak. The locked-in step-up in online activity will undoubtedly lead to further investments in digital capability and partnerships. Digital strategies have never been more vital, but those strategies must be cost efficient too.”