UK retailers suffer as coronavirus rewrites consumer spending rulebook
Measures to fight the spread of coronavirus led to the worst decline in UK retail sales on record last month.
Research by the BRC and KPMG shows that on a total basis, sales decreased by 4.3% in March, against a decrease of 1.8% in March 2019. Sales before and after the lockdown (23rd March) contrasted sharply. In the first three weeks of March, they grew 12% on a total basis but declined 27% in the last two weeks of the period.
Food and essentials faced an unprecedented surge in demand in the early part of March, only to drop significantly into negative growth after the lockdown and introduction of social distancing in stores. The closure of non-essential shops led to deserted high streets and high double-digit declines in sales which even a rise in online shopping could not compensate for.
Sales of computers and accessories, board games, and fitness equipment all rose sharply as a result of the move to home-schooling and work-from-home. In contrast, demand for the latest fashion ranges significantly declined.
“The crisis continues; the retail industry is at the epicentre and the tremors will be felt for a long while yet. Many physical non-food retailers have been forced to shut down entirely or to limit themselves to online only to protect customers and staff,” says Helen Dickinson, Chief Executive, British Retail Consortium.
“Consequently, hundreds of thousands of jobs at are risk within these companies and their supply chains. At the same time, supermarkets brace themselves for lower sales, while still spending huge sums on protective measures, donating to food banks and hiring tens of thousands of temporary staff. We welcome the government’s actions to date, yet millions of livelihoods rely on their continued support.”
“An uncertain future lies ahead and the industry’s reset button has clearly been pressed. Smart retailers will already be thinking about what this means for the future, but the resilience of the sector cannot be underestimated. Likewise, we cannot overlook the huge contribution many retail workers have made to help the nation during the crisis,” comments Paul Martin, UK Head of Retail, KPMG.
