UK Retailers Face Declining Sales Amid Covid-19 Shutdown
Posted On June 9, 2020
Britain’s retailers suffered a second successive slump in monthly sales during May as the coronavirus shutdown took its toll on the high street.
Price cutting by furniture and homewares shops, which were among the worst hit, failed to entice customers to open their wallets, leaving last month’s sales figures down by 5.9% compared with the same month last year.
The British Retail Consortium (BRC) said there were some glimmers of hope last month, which figures from Barclaycard supported, but the outlook remained grim for many retailers even as the lockdown began to ease.
From 15 June, most shops will be allowed to re-open, though a demand by ministers that they require customers to maintain physical distancing has thrown the sector into confusion and sparked demands in some quarters for a relaxation of the distancing rule from 2 metres to 1 metre.
Last month the BRC warned that shops face a “fight for survival” in the coming months as they try to restore their fortunes with tough new physical distancing and health and safety requirements.
Its latest monthly health check of the retail sector found May’s decrease was the second worst decline on record after April’s 19% collapse.
Across the industry, the falling demand for petrol and the temporary closure of many retail outlets meant most retailers remained stuck in reverse gear last month.
There was an uplift for supermarkets and local convenience stores, which enjoyed a second month of soaring sales as shoppers focused on food and were reluctant to travel far to find it. Analysis of those shops allowed to stay open throughout lockdown found that in May, like-for-like sales increased 7.9% from May 2019.
Office supplies, fitness equipment and bicycles all performed well, thanks to strong online sales, and DIY was boosted by the reopening of garden centres, the BRC said.
Helen Dickinson, the BRC’s chief executive said: “Sales in May demonstrated yet another month of struggle for retailers across the country, despite an improvement on the previous month.
“Nonetheless, as the sun came out and restaurants lay dormant, food sales rose with consumers taking to their local parks for beers, BBQs and picnics. Clothing and beauty sales improved slightly on April, as people left their homes to meet outside with friends and family.”
Echoing the BRC’s retail sales report, Barclaycard said consumer spending fell 26.7% in May, compared with the same month a year earlier. While consumers spent 24.5% more at supermarkets, pushing up the amount spent on its list of essential items by 0.9%, this was not enough to overcome a 36.9% drop in sales of non-essentials.
Barclaycard, which says it uses data from almost half of the nation’s credit and debit card transactions, said declines at department stores and in clothing sales of 44.5% and 42.4% respectively added to the decline in non-essential items.
However, May’s figures were an improvement on April when spending on non-essential items contracted by 47.7%.