Coronavirus outbreak increases disparities in UK retail sector
With coronavirus lockdown measures in full swing, April saw a record fall in UK retail sales, according to research from the BRC and KPMG.
On a total basis, sales decreased by 19.1% in April, against an increase of 2.4% in April 2019.
Food sales were disappointing, with the virus preventing large family gatherings and turning Easter into a more modest affair. For many non-food goods, such as clothing, footwear and large household items, the decline was particularly steep.
The proportion of goods purchased online rose sharply, with products such as games consoles, bicycles, office equipment, and haberdashery, all high on the list. However, even this could not make up for the loss of in-store purchases.
“Coronavirus has accelerated many of the trends seen prior to the outbreak and it is likely that as the lockdown wears on, these new shopping habits – such as the trend towards online purchases - will become more entrenched for many consumers,” says Helen Dickinson, Chief Executive at British Retail Consortium.
“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.”
“Monday’s Recovery Strategy was an opportunity missed to provide a clear and detailed roadmap, outlining when and how shops will reopen after the 1st June, so that retail can help get the economy moving and the public can get all the goods they need.”
Paul Martin, UK Head of Retail, KPMG, comments: “With the nation firmly under lockdown throughout April, drastic retail sales declines were to be expected. But that pain hasn’t been felt equally.”
“So few physical stores, or indeed retailers, were open for business in the month, making like-for-like comparisons hard to establish, but the ability to continue trading or leverage online channels was beneficial for the fortunate few though.”
Aside from ‘essential’ retailers still operating physically, consumers have had little alternative but to log-on, and online sales were up nearly 60%. “The disparities in retail continue, not only between ‘essential’ and ‘non-essential’, but also between those with an online channel and those without,” Martin states.
Eyes are firmly fixed on how the easing of restrictions will impact consumer spending going forwards, with the acceleration of online sales likely here to stay and overall demand in certain categories, like fashion, remaining subdued for some time, he concludes.
