Retail sales improve, but stores still suffering

Data from the Office for National Statistics (ONS) shows that in the three months to May 2020 volume sales fell by 12.8% when compared with the previous three months – the biggest decline on record.

In addition, with households stockpiling food and home products in March, food stores saw a 0.3% decline in the number of goods sold in May, as shoppers worked their way through the extra food in their cupboards.

Fuel sales also remained 42.5% lower than February as governments across the UK continue to encourage people to maintain social distancing and avoid unnecessary travel. However, sales rose month-on-month as some employees started returning to work.

The ONS data also shows that the rate of growth in online-only retailers increased strongly, rising 24.3% in the three months to May, and up 21% compared with April.

Online shopping hit a new high in May, making up 33.4% of all sales, compared with 30.8% in April.

In response to the figures, Ian Geddes, head of retail at Deloitte, said: “Overall food sales values were flat, at +0.3% month-on-month, but, whilst grocers may have hoped for stronger food sales in what is traditionally the start of barbecue season, online grocery sales remain strong, up by 21.1% compared to April and now accounting for 11.3% of all food sales.”

Richard Lim, chief executive of Retail Economics, added: “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.”