The Office for National Statistics (ONS) said retail sales volumes rose by 3.6% between June and July. Clothing sales grew by 11.9% and people spent more money on petrol while online shopping fell by 7%. It said sales are now 3% higher than February before WHO declared a pandemic and the UK was placed in lockdown.
In July, retail sales continued to recover as the value of sales increased by 4.4% and volume sales by 3.6% when compared with the previous month. When compared with February 2020’s pre-pandemic level, total retail sales were 1.7% and 3.0% higher in value and volume terms respectively.
When compared with the previous three months, a stronger rate of growth is seen in the three months to July, at 5.1% and 6.1% for value and volume sales respectively. This was following eight consecutive months of decline in the three-month on three-month growth rate.
The only measure to show a decline is the three months to July when compared with the same three months a year earlier, with a fall of 5.3% for value sales and a fall of 4.1% for volume sales.
While total retail sales may be recovering in July, the wider economy still entered a technical recession in Quarter 2 (April to June) 2020. Recent analysis on the impact of the coronavirus pandemic looked at the output measure of gross domestic product (GDP). In Quarter 2 2020, the economy shrank by a further 20.4% from the fall of 2.2% in Quarter 1 (January to March) 2020 and is 17.2% smaller than in February 2020.
Growth in the retail sales industry contributes approximately 5.4% to GDP. As we see unprecedented changes to the economy, the pandemic has also changed the shape of the retail industry. Despite total levels of sales increasing to slightly above pre-pandemic levels, not all retail sectors experienced this bounce back.
For non-store retailing, there was some contraction in June and July 2020 from the sharp growth in March, April and May 2020; possibly an impact of an increasing number of retail stores re-opening. The monthly decline in July of 2.1% in non-store still results in volume sales being 49.2% higher than pre-pandemic levels in February. In July 2020, as more retail stores began to trade once again and services such as restaurants and bars opened in parts of Great Britain, online retail sales volumes decreased by 7.0% when compared with June 2020
Will Broome, CEO and Founder of retail technology app, Ubamarket, commented on the results and how retailers can continue to grow despite the COVID recession:
“These results are fantastic to see as more people feel more confident about venturing to the high street but with the COVID recession hitting, retailers do need to be prepared for another potential dip in sales. This has been one of the most turbulent time in the history of the high street with shops having to limit footfall, less customer interaction and more stringent safety measures. Retailers would do well to think of alternatives to drive sales while maintaining the safety and confidence of their clientele”.
