Coronavirus lockdown hits UK retailers hard as January sales slump

January saw UK retail sales growth decline to its lowest level since May of last year, according to research from the BRC and KPMG.

They increased 7.1% on a like-for-like basis from January 2020, when they had decreased 0.8% from the preceding year.

E-commerce channels continued to experience historic growth with more than 60% of all non-food sales transacted online.

But the third coronavirus lockdown meant that the traditional January sales period did not really materialise for the rest of the retail sector, with just a handful of categories recording any growth.

#Coronavirus has changed the way we shop and we must all play our part to combat covid-19! If you're visiting a store, please follow these steps to ensure everyone can shop safely 👇 pic.twitter.com/A9D3X92M96
— The British Retail Consortium (@the_brc) January 15, 2021

Helen Dickinson, Chief Executive at BRC, comments: “The current coronavirus lockdown has hit non-essential retailers harder than in November, with the new variant hampering consumer confidence and leading customers to hold back on spending, especially on clothing and footwear.”

She adds that retailers have worked hard to expand their online delivery and Click and Collect offerings to ensure everyone can get the products they need during lockdown, hence the booming online non-food sales space.

“Retail firms are supporting the government’s efforts to combat the virus and the industry will continue to play its part in the fight by stepping up safety measures to keep their teams and customers safe,” she says.

“However, three periods of prolonged closure for some and the ongoing uncertainty around reopening puts many retailers in a precarious position.”

“If government wants to avoid further administrations of otherwise viable businesses and thousands of jobs losses, it must provide those firms which have been hardest hit with the necessary financial support, including targeted business rates relief beyond March.”

Paul Martin, UK Head of Retail at KPMG, says: “With much of the UK in lockdown for the foreseeable weeks, conditions for retailers will continue to be incredibly challenging.”

“On the one side dealing with a continued increase in online demand versus subdued demand on the high street - and overall in many cases, thinner margins and rising logistics costs and complexities post Brexit.”

He concludes: “Consumers are well versed in lockdown living now, and looking ahead, fortunes will be mixed but pent up savings and a successful vaccine roll-out should help to support recovery in the retail sector later in the year.”