Tuesday 11 August 2020 8:23 am

UK retail sales grow following lockdown easing

UK retail sales grew in July as the easing of lockdown restrictions released pent-up demand, but high street stores continued to struggle.

On a total basis, sales increased 3.2 per cent last month, compared to a jump of 0.5 per cent in July 2019, which was the second consecutive month of growth since the coronavirus pandemic hit the UK in March.

Read more: UK retail sales bounce back as shops reopen from lockdown

In the three months to the end of July sales of non-food products in bricks and mortar stores plunged 29.3 per cent in total, and 11.3 per cent on a like-for-like basis.

Fashion, jewellery and beauty stores in particular are struggling to survive, according to the British Retail Consortium, which this morning repeated its call for government help with rent payments.

Food, homeware and furniture retailers performed the strongest, as lockdown prompted more spending at home. 

In the three months to July, food sales were up 8.2 per cent on a like-for-like basis, the highest level since June 2009.

Online UK retail sales continued to soar during July, with non-food sales increasing by 41 per cent.

The online penetration rate increased from 29.7 per cent last year to 42 per cent, after the pandemic accelerated the shift to internet shopping. 

BRC chief executive Helen Dickinson said: “While the rise in retail sales is a step in the right direction, the industry is still trying to catch up lost ground, with most shops having suffered months of closures. 

“The fragile economic situation continues to bear down on consumer confidence, with some retailers hanging by only a thread in the face of rising costs and lower sales.”

Read more: UK retail sales surge close to pre-lockdown levels in June recovery

Paul Martin, head of UK retail at KPMG, added: “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.”