Retail sales volume recover in March but figures for the first quarter remain subdued overall, ONS reports


Retail sales volumes continued to recover in March 2021, with an increase of 5.4% when compared with the previous month reflecting the effect of the easing of coronavirus (COVID-19) restrictions on consumer spending; sales were 1.6% higher than February 2020 before the impact of the coronavirus pandemic, according to the latest figures from the Office for National Statistics (ONS).

Non-food stores provided the largest positive contribution to the monthly growth in March 2021 sales volumes, aided by strong increases of 17.5% and 13.4% in clothing stores and other non-food stores respectively.

Food stores reported monthly growth of 2.5% in March 2021, with strong growth in specialist food stores (butchers and bakers) likely reflecting the continued closure of the hospitality sector during the Easter period.

Automotive fuel retailers also reported strong monthly growth of 11.1% as travel restrictions were eased towards the end of the reporting period.

Despite strong March figures, retail sales for the quarter have been subdued overall; in the three months to March 2021, retail sales volume fell by 5.8% when compared with the previous three months, with strong declines in both clothing stores and other non-food stores as a result of the tighter lockdown restrictions in place.

The proportion spent online decreased to 34.7% in March 2021, down from 36.2% in February 2021 but still above the 23.1% reported in March 2020; the value of online spending did increase in March, but spending in-store increased at a faster rate.

Ian Geddes, head of retail at Deloitte, said:  “Today’s retail sales figures give us the first year-on-year comparisons since the start of the COVID-19 pandemic. With non-essential shops closed in March, as they were at the end of March 2020, it is hugely encouraging to see sustained momentum as total sales continued their steady growth.  

“As expected, consumers continued to shop online for new purchases in the absence of physical stores, this month accounting for 34.7% of all retail sales, slightly down from the previous month but still considerably higher than March 2020. After an exceptional year for the industry, replete with its own challenges, this is an encouraging indication of the store coming. Whether the level of online spending will be sustained over the coming months remains to be seen but, for many consumers, online shopping has become as convenient as the physical store experience.  

“With the UK recording its warmest March day in over 50 years, the arrival of spring sunshine was perfectly timed with new season collections, giving clothing and footwear sales a small boost. Eagle-eyed consumers may have even spotted the re-appearance of some 2020 collections, as retailers brought back stock impacted by the UK’s first lockdown. This is unlikely to put off consumers, however, many of whom have been buying fewer new products in an effort to adopt a more sustainable lifestyle during COVID-19 pandemic. 

Easter celebrations 

“The relaxation of outdoor socialising rules and Easter celebrations appear to have boosted food sales this month as consumers made up for smaller Christmas gatherings. As predicted, items to spruce up gardens in preparation for outdoor socialising, and the long bank holiday weekend, have fuelled sales in DIY and homeware this month.  

‘Welcome back’ discounting

“The reopening of the High Street on 12th April was received enthusiastically by consumers, as they returned in greater numbers than expected for the time of year, with some retailers offering ‘welcome back’ discounts.  

“In the absence of many spending opportunities so far this year, some consumers also returned with deeper pockets than usual as a result of having greater levels of savings.  

“As the UK continues to roll out its vaccine programme, we’re likely to see greater numbers return to stores in due course.”  

Lynda Petherick, head of retail, Accenture UKI, said: “After a year of what’s felt like endless lockdowns, there is now a palpable sense of excitement among retailers and shoppers alike as the nation gears up for a cautious return to normality.

“While March saw some gradual easing of social restrictions and encouraging sales growth, it will be April’s figures, which will factor in non-essential retail reopening, that retailers will be waiting for with bated breath. Naturally, retailers’ hopes are high for pent up consumer demand being unleashed around this milestone, but the need to create both a safe and engaging in-store experience as they open their doors will be paramount.

“With online spending figures for February and March continuing to reach all-time highs, we expect demand for online to remain strong post the reopening of non-essential retail. Though retailers will be keen to capitalise on the return of shoppers to the high street, they must also strike a balance across both their physical and digital offering, or risk losing out to competitors that learned strategic lessons from the pandemic.”