Retail sales in the UK decreased by 4.3% in the five weeks to 4 April, compared to a drop of 1.8% in the same period last year, according to the latest data from the BRC–KPMG Retail Sales Monitor, however sales of food and essential items saw an 'unprecedented surge'.
The overall decline is also below the three-month and 12-month average declines of 1.4% and 0.6% respectively and the worst since the monitor began in January 1995.
UK head of retail at KPMG, Paul Martin, said, “Retail sales experienced a historic drop in March, with COVID-19 changing the consumer landscape significantly. Lockdown has prompted a fundamental rethink of what is deemed essential.”
The report pointed out that sales before and after the lockdown, announced on 23 March, contrasted sharply.
Retail sales grew by 12% in the first three weeks of March before the lockdown and then plummeted 27% in the two weeks to 4 April.
On a like-for-like basis, retail sales decreased by 3.5% in March 2020 compared to the same period in 2019.
'Dramatic Swings'
Helen Dickinson OBE, chief executive of the British Retail Consortium, said, “In March, the necessary measures to fight the spread of coronavirus led to the worst decline in retail sales on record.
“Furthermore, the headline figure masked even more dramatic swings: food and essentials faced an unprecedented surge in demand in the early part of March, only to drop significantly into negative growth after the lockdown and introduction of social distancing in stores.”
Over the three months to March, Food retail sales increased 4.9% on a like-for-like basis and 5.1% on a total basis, the data showed. This is higher than the 12-month total average growth of 2.4%.
According to IGD chief executive, Susan Barratt, UK grocery retailers faced an unprecedented series of challenges in March in light of the coronavirus outbreak in the country.
Barratt added that retailers along with their suppliers and logistics partners played an important role in ensuring a continuous supply of food and essential products as well as supporting vulnerable groups in the society.
Non-Food Sales
Online non-food sales increased by 18.8% during this period compared to a growth of 2.5% in March 2019, the report revealed.
The online penetration rate for non-food items increased from 29.3% in March 2019 to 43.5% in March 2020.
Dickinson explained, “The closure of non-essential shops led to deserted high streets and high double-digit declines in sales which even a rise in online shopping could not compensate for.
“Sales of computers and accessories, board games, and fitness equipment all rose sharply as a result of the move to home-schooling and work-from-home. In contrast, demand for the latest fashion ranges significantly declined.”
Outlook
Dickinson feels that the retail industry is at the epicentre of the crisis and is likely to feel the aftermath for a longer time.
She added, “Many physical non-food retailers have been forced to shut down entirely or to limit themselves to online only to protect customers and staff. Consequently, hundreds of thousands of jobs are at risk within these companies and their supply chains.
“At the same time, supermarkets brace themselves for lower sales, while still spending huge sums on protective measures, donating to food banks and hiring tens of thousands of temporary staff. We welcome the Government’s actions to date, yet millions of livelihoods rely on their continued support.”
According to Martin, the retail industry has already hit the reset button in the face of an uncertain future.
He explained, “Smart retailers will already be thinking about what this means for the future, but the resilience of the sector cannot be underestimated. Likewise, we cannot overlook the huge contribution many retail workers have made to help the nation during the crisis.”
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
