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Published on August 12th, 2020 | by The GC Team


“September will be the real test for retailers”

The next Quarter Rent Day could see many otherwise viable retail businesses fall into insolvency in the face of rising costs, lower sales and accumulating rents, as the fragile economic situation continues to bear down on consumer confidence and retail’s recovery remains hampered by consumers still reluctant to go out, and fewer impulse purchases being made.

According to the British Retail Consortium, total sales increased by 3.2% in July, the second consecutive month of growth since the start of the pandemic, but many shops continued to struggle as footfall was down.

Helen Dickinson, BRC Chief Executive said: “While the rise in retail sales is a step in the right direction, the industry is still trying to catch up lost ground.”

Online non-food sales increased by 41.0%, against a growth of 3.7% in July 2019, with the penetration rate rising from 29.7% to 42.0% year on year.

With most shops having suffered months of closures, total in-store sales of non-food items declined 29.3% over the three months to July, while online non-food sales increased 7.9%.

Paul Martin, UK Head of Retail at KPMG, said: “While social distancing restrictions have eased and our daily lives have started to return to a degree of normality, shoppers are still focused on life at home for the most part.

“September will be the real test for retailers this quarter, traditionally being a month of high volumes driven by the return to school after the holiday season.

“That said, with the furlough scheme unwinding and wider economic uncertainty set for the autumn, consumer anxiety will likely rise along with it. This will place more scrutiny on disposable income and make life even tougher for retailers.”

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