UK retail sales fall by record 5.1% in March, ONS figures show

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Retail sales fell by 5.1% in March, the largest fall on record, as many stores ceased trading from 23 March following official government guidance during the coronavirus (COVID-19) pandemic, new figures from the Office for National Statistics show.

In March 2020, clothing store sales saw a sharp fall when compared with the previous month, at negative 34.8%.

Food stores and non-store retailing were the only sectors to show growth in the monthly volume series in March 2020, with food stores seeing the strongest growth on record, at 10.4%.

In the three months to March 2020, retail sales volume fell by 1.6% when compared with the previous three months, with strong declines in non-food stores and fuel.

Online sales as a proportion of all retailing reached a record high of 22.3% in March 2020 as consumers switched to online purchasing following the pandemic.

Paul Martin, UK head of retail at KPMG, said: “The impact of COVID-19 on the retail industry is ringing painfully clear in the latest ONS retail sales figures, and indeed in the latest consumer confidence survey by GfK. The unprecedented situation and the nation’s subsequent lockdown has unsurprisingly seen sales plummet rapidly by historic rates, whilst consumer confidence is teetering above the historic lows recorded during the most recent financial crisis. It’s important to remember that March retail sales figures only capture a small proportion of the lock down – coming in place on March 23rd – but what is clear is that sales of non-essentials had evaporated well before the restrictions came into place, as anxiety about the virus started to build.   

“Grocers and online retailers may appear beneficiaries with our high streets currently void of all footfall, but the surges here aren’t likely to be enough to make up for the lost ground across the sector more broadly. Added to that, a surge in sales hasn’t necessarily meant a rise in profits, with added costs associated with meeting demand in this climate. If considering the non-essential sales missed due to lock-down, it’s likely these will be lost forever and in many cases retailers will be frantically writing off stock. Only those deemed ‘essential’ currently, or those with robust online operations, are able to adapt to this current climate. Those that can’t, are naturally fixated on when the restrictions will lift.  

“If confidence deteriorates further, it’s likely retail spend will be far from anyone’s mind when things do return to the ‘new normal’. There is little question that the retail landscape has changed permanently, but the key question will be: which retailers will still be fit for purpose in the next chapter?”

Jo Causon, CEO at the Institute of Customer Service, said: “Few will be surprised by today’s figures, which paint a bleak picture of the impact of COVID-19 on our society. Discretionary spending has been devastated by the pandemic, with sectors such as fashion and gardening hit particularly hard by the huge decline in footfall and economic uncertainty

“The impact of this crisis will be felt for years to come – and it is too early to tell if consumer behaviour has been permanently shifted away from certain sectors such as fast fashion. It is reassuring to see that those retailers who have invested in their service offering have won the public’s trust – with our own figures showing that two thirds sympathised with the pressure customer service staff were under in providing essential items and online deliveries for those most in need.

“Retailers should be prepared for the situation to get worse before it gets better, but they must not panic. Those that maintain a clear focus on understanding their customer’s needs and adapt and innovate to meet changing demands will be in the strongest position to rebound as we move beyond this crisis.”