Mixed month for UK retailers as coronavirus recovery gains pace
The UK retail sector continued to show signs of recovery from the coronavirus outbreak in August, with like-for-like retail sales up 4.7% compared to last year, according to research from the BRC and KPMG.
The online channel remains prominent, with penetration rates still high at 39.3% for non-food. The vast majority of categories in this space realised significant growth in August.
“While the overall online penetration rate has declined in recent months, the significant acceleration of the channel is here to stay. With this in mind, retailers need to focus on the cost of doing business, as online is generally more expensive to operate,” says Paul Martin, UK Head of Retail at KPMG.
The coming months will be far from problem free, however, with economic uncertainties – including the unwinding of the furlough scheme – likely to leave many consumers thinking carefully about their spending priorities.
Despite another month of growth in August, retail sales remain down overall since the start of the pandemic. Remote working has continued to help sales in home goods, such as food, computing, furniture and TVs. At the same time, however, city centre retailers have been hit hard by low footfall and poor sales.
“Many retailers are continuing to struggle, particularly those in clothing, footwear and beauty, that are reliant on high footfall locations. With rents accumulating, and the September quarter payment date fast approaching, many retailers are hanging on by a thread,” says Helen Dickinson, Chief Executive at the British Retail Consortium.
“Unless businesses and government can successfully persuade office workers back into city and town centres, some high street retailers will be unable to afford their fixed costs. Government will need to act fast or September will see more shops close and more job losses realised.”
