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RETAIL ENVIRONMENT

It's official - sales are down

The impact on retail of the economic lockdown in April 2020 has been revealed with the Office for National Statistics (ONS) reporting an all-time low in sales.

The ONS recorded its lowest ever retail sales in April – it only began collecting the data in 1988 - for both value and volume, as many stores paused trading as a result of the Coronavirus lockdown on 23 March.

The record fall of 18.1 per cent in April followed the fall of 5.2 per cent in March.

Even food stores were down by 4.1 per cent, although this was mainly due to a fall back from the strong growth of 10.1 per cent in March due to the panic buying sales spike.

In April, 18 per cent of food stores reported having zero turnover, but this was mainly due to the 28.7 per cent of zero returns for specialist food stores. A further 13.6 per cent of alcohol and tobacco stores reported having zero turnover, although the volume of sales for these stores increased by 2.3 per cent – on the back of 23.9 per cent growth in March.

The only other sector to show an increase in volume sales during the month was non-store retailing, reaching record levels of 18 per cent growth in April, as many consumers switched to online shopping; with only 3.5 per cent of online retailers reporting zero turnover.

The majority of fuel stores continued to trade with just 3.3 per cent reporting zero turnover, however movement restrictions meant that fuel sales declined by a record 52 per cent in April.

All stores within the non-food sector had record falls, with clothing stores experiencing the strongest month-on-month decline at 50.2 per cent; following the sharp decline in March of 34.9 per cent.

Of those businesses responding to both the Business Impact of COVID-19 Survey and also the Retail Sales Inquiry, non-food stores - which are department stores, textile, clothing and footwear, household goods and other non-food - were more negatively impacted by the COVID-19 pandemic, reporting larger proportions of decreased turnover in the reporting period.

Food and online retailing, on the other hand, reported the highest proportions of increased turnover.

Online sales as a proportion of all retailing reached a record high of 30.7 per cent in April, exceeding the original record of 22.4 per cent recorded the previous month. All sectors reached their highest-recorded proportions except non-store retailing, which reached record proportions in February and March, both at 83.2 per cent.

There was a larger uptake of online spending for food as its proportion of online spending increased from 5.7 per cent to 9.3 per cent.

Clothing stores continued to decline on the month reporting a monthly growth rate of negative 14.5 per cent, following a fall of negative 16.1 per cent in March. However, clothing stores still reached a record proportion of online sales at 46.4 per cent, when compared with 26.6 per cent in March.

“While we see record declines in total retail sales, there was a high percentage of stores that shifted to completely online sales,” stated the ONS. “With the temporary closure of their stores the shift to online has resulted in record proportions of online spending for all stores – online-only retailers, who were already operating online, were the only exception to this.”

Textiles, clothing and footwear showed the largest proportion of businesses focused on completely online-only trading at 41 per cent.

Kyle Monk, head of retail insight and analytics at the British Retail Consortium, commented: “Retailers urgently need clarity on the reopening of shops in June - shops need time to prepare and the certainty to do so, before they spend millions on necessary safety and social distancing measures.

"By getting more of retail up and running, not only can customers get all the products they need, but the industry can play its part in protecting jobs and kick starting the economy.” 

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