Retail sales inch up in July as lockdown measures ease

Total retail sales increased 3.2% year on year, compared with a 0.5% increase in July 2019, according to the BRC-KPMG retail sales monitor. This was above the three-month average of 0.4% and far above the 12-month decline of 1.9%.

Like-for-like UK sales, excluding non-essential stores but including online sales, also went up 4.3% from the same month last year when they increased just 0.3% from 2018.

Food sales saw the highest rate of growth since June 2009. Over the three-month period to July, food sales increased 8.2% on a like-for-like basis and 6.1% on a total basis. This was also above the 12-month average of 3.2%.

Online non-food sales continued to be strong,  increasing 41% in July, against growth of 3.7% in July 2019. This was below the three-month average growth of 49.7% but above the 12-month average of 19.9%.

Online non-food penetration surged to 42%, up from 29.7% in the same month last year.

On the other hand, in the three months to July 2020, in-store non-food sales declined 29.3% on a total basis and 11.3% like for like, which was worse than the 12-month average decline of 17.7%.

Over the three months to July, non-food retail sales grew 7.9% on a like-for-like basis but declined 4.3% in total.

Dickinson added: “July saw the second month of growth as lockdown measures eased and demand gradually began to return in some places. Many shops continued to struggle as footfall was down, with many people still reluctant to go out, and fewer impulse purchases.

“The strongest performance came from food, furniture and homeware, as consumers increasingly invest in their time at home, however, many shops, particularly in fashion, jewellery and beauty, are still struggling to survive. Online sales remained buoyant, slowing only slightly despite more shops reopening.”

KPMG head of retail UK Paul Martin said: “While social distancing restrictions have eased and our daily lives have started to return to a degree of normality, shoppers are still focussed on life at home for the most part. Online sales continue to remain prominent – accounting for over 40 per cent of sales – while food and home focussed categories like furniture, homewares and kitchen accessories remained among the strongest performers. With many of us continuing to work from home, sales of computing equipment soared too.

“September will be the real test for retailers this quarter, traditionally being a month of high volumes driven by the return to school after the holiday season. That said, with the furlough scheme unwinding and wider economic uncertainty set for the autumn, consumer anxiety will likely rise along with it. This will place more scrutiny on disposable income and make life even tougher for retailers.”