Retailers continued their slow recovery during August, as sales volumes increased by 0.8% compared with July, according to the Office for National Statistics (ONS).
The figures show August was the fourth consecutive month of growth, also showing a 4% increase compared with February, before the country faced the full impact of the coronavirus pandemic.
The ONS’ deputy national statistician for economic statistics, Jonathan Athow, said: “Sales of household goods thrived as the demand for home improvement continued and, despite a dip this month, online sales remained high.
“However, clothing stores continued to struggle with sales still well below their February level. Overall, the switch to greater online sales means the high street remains under pressure.”
The figures for August also show:
- Retail sales values increased 0.7% compared with July and 2.5% compared with February
- Non-store retailing volumes were 38.9% above February and clothing stores were still 15.9% below February’s pre-pandemic levels
- Spending for home improvements increased, with sales volumes in household goods stores up by 9.9% compared with February
- Online retail sales fell by 2.5% compared with July, but strong growth seen during the pandemic means sales were still 46.8% higher than in February
Lynda Petherick, head of retail for professional services company Accenture UK and Ireland, said consumers were “getting back to normal”.
But she warned: “A dark cloud still hangs over the sector which means the apparent rebound could prove to be a false dawn.
“The recent tightening of lockdown measures, both locally and nationally, will be a bitter pill to swallow for retailers, and could lead to a steep drop in consumer confidence in September.”
Emma-Lou Montgomery, associate director for Personal Investing at Fidelity International, also had a warning: “It’s not all as rosy as it seems and beneath the headline figure is a very mixed bag.
“There are some tough decisions in store for retailers. More shop closures and redundancies are inevitable as local lockdowns rise and the end of the furlough scheme draws ever nearer.”
She cited the decision of department store John Lewis to suspend bonuses for the first time in 67 years as evidence of the “heavy impact of the pandemic even on the largest of retailers”.
“While the next few months are shrouded in nervous uncertainty, one thing for sure is that the Christmas retail period will be more important than ever for retailers this year.”
Lisa Hooker, consumer markets leader at PwC, added that, despite the “stellar recovery”, not every category of retailing had shared in the profits.
“As we approach the run up to Christmas – during which the lion’s share of profits are normally made – retailers will be hoping that the fragile recovery is not derailed by more widespread lockdowns, rising unemployment or dented consumer confidence.”
Helen Dickinson, chief executive of the British Retail Consortium, described the recovery as “fragile”, adding that city centre shops still suffer from low footfall.
She added: “With further lockdowns looming, the government must provide clarity on the impact it will have for shops.
“Retailers have invested hundreds of millions making stores safe and secure for customers during the pandemic; this includes perspex screens, social distancing measures and additional hygiene measures. As such, retail remains a safe space for consumers, even under local lockdowns.”