Retail sales volumes partly rebounded in May 2020 with an increase of 12.0% when compared with the record falls experienced in the previous month, but sales were still down by 13.1% on February before the impact of the coronavirus (COVID-19) 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 May 2020, aided by a strong increase of 42.0% in household goods stores, with the opening of hardware, paints and glass stores reflected in this sector, the ONS said.
The proportion spent online soared to the highest proportion on record in May 2020 at 33.4%, which compares with the 30.8% reported in April 2020.
While there was a strong increase in the volume of fuel sales in May 2020, levels still remain 42.5% lower than February 2020, before government travel restrictions were in place.
In the three months to May 2020, the volume of retail sales decreased by a record 12.8%, with declines across all stores except food and non-store retailing.
Commenting on the latest data, Richard Lim, CEO, Retail Economics said: “A seismic shift towards online pushed this channel to new heights. Retailers have been working tirelessly to boost their online capacity to cope with this intense period of demand. Those with the most flexible operating models and who have been fleet-of-foot are retaining customers and reaching out to a new wave of online converts.
“Many consumers are shopping for products they had previously only ever purchased in a shop. They are overcoming the initial barriers of setting up online accounts, entering payment details and gaining trust. This shift in behaviour will inevitably be sticky for a large proportion. The critical question retailers will be asking themselves is how long-lasting the shift will be.
“The industry remains in survival mode. Our research showed 8 in 10 retailers are considering making redundancies while half are considering store closures in a range of cost-saving measures. As they take a forensic look at their cost base, other areas of consideration also include lease renegotiations (68%) and review of supply contracts (63%). As the Government begins to withdraw support for businesses and households, the true cost of the pandemic will begin to emerge.”
Karen Johnson, head of retail & wholesale at Barclays Corporate Banking, said: “The prevailing trend in these statistics is clear – spend is down versus 2019 – however there is a lot more going on in this sector than this top-level headline lets on.
“Despite shops taking their first tentative steps towards reopening in May, the long-term future of the high street will be something that the sector keeps a keen eye on. UK office workers account for a significant proportion of the footfall in shopping centres and town centres around the country, so (with any return to the office likely to be very gradual) UK retailers will be looking at ways to adapt to this new geographic distribution of their customer base.
“Another topic of interest is the experience economy, which was an area of growth at the start of this year. The willingness of consumers to spend on experiential activities has been tempered by the lockdown – with many experience providers having to shut their doors – and we have seen a larger share of the consumer wallet being spent on every-day and household purchases, as people spend an increasing amount of time at home. As all-kinds of shops and businesses begin to open their doors with the easing of lockdown, the balance of this spend will be a key area to watch in the months ahead.”