August bounce-back masks “changed shape” of retail industry
Although latest figures from the Office for National Statistics (ONS) show an impressively rapid V-shaped recovery for UK retail sales in August 2020, surpassing pre-Covid levels (see graph), the detailed retail category performances reveal winners and losers. “Despite total levels of sales increasing to above pre-pandemic levels,” says the ONS, “the pandemic has changed the shape of the retail industry.”
Total retail sales were up 0.8% by volume and 0.7% by value compared to July, establishing a fourth consecutive month of growth and achieving levels of 4% (volume) and 2.5% (value) above the pre-pandemic February figures.
However, “there was a mixed picture within the store types,” added the ONS: notably a huge 46.8% jump in online sales compared to February, and, at the other extreme, a 15.9% drop in sales at clothing stores. Spending on home improvements continued to rise in August as sales volumes within household goods stores increased by 9.9% when compared with February.
The mixed picture can be largely explained by the peculiar pressures of lockdown: the closure of many “non-essential” physical stores with a consequent explosion in online shopping, then a resurgence of store sales when restrictions were lifted.
There is every indication, however, that the shopping habits acquired during lockdown are not being abandoned, and online has enjoyed not just a rapid, but a permanent, uplift. Although online retail sales fell by 2.5% in August compared with July, the “strong growth experienced over the pandemic has meant that sales were still 46.8% higher than February’s pre-pandemic levels.”
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