UK retail a tale of two channels amid coronavirus lockdown

November saw the brakes put on the UK retail sales growth that had been seen over the previous three months, according to research from BRC and KPMG.

On a total basis, sales increased by 0.9% in November, against a decline of 0.9% in November 2019. This is below the three month average growth of 3.9% and above the 12 month average decline of 0.3%.

In-store non-food sales saw a significant decline as a result of the coronavirus lockdown in England, although some retailers were able offset a proportion of lost sales through greater online and Click and Collect sales.

Extended discount periods helped spread demand and offered customers deals on gifts including the latest gaming consoles, other electronics and home accessories.

However, the disparity between online and in-store non-food sales widened, with the highest online penetration rate since May. Non-food stores once again experienced double digit decline as tighter restrictions were bought in across England.

“Despite sales remaining positive overall, parts of the industry continue to suffer. After two periods of prolonged closure, and continued low footfall in towns and city centres, many retailers face the stark reality of further job losses and store closures as a result of mounting rent bills and a return to full business rates liability from next April,” says Helen Dickinson, Chief Executive, British Retail Consortium.

“Government should extend the moratorium on debt enforcement and target those retailers who have been hardest hit by the pandemic with further business rates relief beyond April 2021.”

Paul Martin, UK Head of Retail, KPMG, comments: “Despite the on-going unprecedented environment, UK retail fought hard during November to win growth on last year.”

“ It was a tale of two channels however, as lockdown resulted in a dismal performance for high street retailers, whilst online sales rose by impressive double figures across most categories.”

The gap between winners and losers continues with home focused items such as technology and household appliances putting in a very strong performance, whilst fashion sales fell away at a significant level..

“The evolution of Black Friday from a day to now spanning multiple weeks, has further distorted trading patterns and will have likely brought Christmas purchases forward. Despite this, high street retailers will still be hoping that consumers will be pounding the pavements in the coming weeks as they battle hard to make up for lost ground in this crucial time,” Martin adds

”The arrival of a vaccine programme will help to boost consumer confidence, but conditions are likely to remain challenging for the immediate future and retailers will need to fight hard in the January sales for every penny in consumers’ pockets,” he concludes.