Published on August 21st, 2020 | by The GC Team0
July retail “bounce back” has complex background
The Office for National Statistics’ (ONS) first estimate of retail sales in Great Britain in July, released today (21 August), shows sales volumes increased by 3.6%, compared to June, and are now 3% above the pre-pandemic levels of February 2020.
The headline figures have prompted media talk of a retail bounce back, with the effects of more “non-essential” physical stores reopening apparently boosting the performance of the High Street.
But the detail shows a more complex picture, and, according to the ONS, “despite total levels of sales increasing to slightly above pre-pandemic levels, not all retail sectors experienced this bounce back. For food and non-store retailing, levels remained higher than before the pandemic, while non-food and fuel sales are still below their pre-pandemic levels.
“The monthly growth rates seen in July 2020 for non-food at 10.0% and fuel at 26.2% show some recovery. However, these strong monthly growths are from exceptionally low levels. In July, volume sales within non-food stores were still 6.6% lower than February 2020.”
Online retail sales showed a 7.0% drop in July when compared with June, but, says the ONS, “the strong growth [of online retail] experienced over the pandemic has meant that sales are still 50.4% higher than February’s pre-pandemic levels.” It appears that the pandemic has inculcated new buying habits that, even if they fade a little, will never return to the online/physical purchases balance before COVID-19.
The ONS concludes, against a background of deep recession in the wider UK economy, that “as we see unprecedented changes to the economy, the pandemic has also changed the shape of the retail industry.”
Commenting on the figures Sara Korchmaros, chief commercial officer at retail technology platform Recash, said: “After months on the ropes, and against all the odds, the retail sector is emerging as Britain’s Comeback Kid. Nevertheless, no-one should confuse the return of more normal sales figures with normality on Britain’s embattled high streets. Physical stores still look and feel very different, with many wrestling with chicanes and one-way systems that hardly shout ‘come in and browse’.
“The most agile high street brands are now seamlessly blending their digital and bricks and mortar offerings, with physical stores often playing a supporting role to their online counterparts.”
David Jinks MILT, head of consumer research at e-commerce delivery expert ParcelHero, welcomed the resurgence of bricks-and-mortar retail, but cautioned: “However, any retailer who still thinks online sales are an extra – not a key part – of their overall sales strategy shouldn’t get too smug. Online sales are still an enormous 50.4% higher than they were in February. This recovery remains fragile, and fears of a second wave of the Covid-19 virus, once children return to school, could quickly halt the progress seen in July. An omnichannel sales strategy, embracing both shop and online sales, with both services complementing the other, is the only way forward for stores as retail claws its way back from the clutches of the coronavirus.”