UK retail sales continued to fall in May (5.9%) but the pace of decline eased as shoppers ventured out encouraged by the warm weather, according to the British Retail Consortium’s monthly monitor. This fall was an improvement on April’s decrease of 19.1% but still represented a weak result as it is compared to a record low in May 2019. The industry is speculating on the likely consumer reaction to England opening non-essential shops from next Monday (15th June).
With restaurants still closed, food sales rose as households were able to enjoy unseasonal good weather over two Bank Holiday weekends. Clothing and beauty sales improved slightly with good sales recorded on DIY, fitness equipment, games and office supplies as more people continued to spend more time at home. However, “sales in May demonstrated yet another month of struggle for retailers across the country, despite an improvement on the previous month,” BRC chief executive Helen Dickinson commented.
Non-essential categories such as fashion continued to suffer and the BRC warned that as stores reopen many retailers will struggle with lower activity and changed shopping habits as consumers move online more rapidly.
“While the month showed record growth in online sales, many retailers will be anxious to see whether demand returns to our high streets when non-essential shops reopen from June 15. Weak consumer confidence and social distancing rules are likely to hold back sales. Furthermore, there are concerns that if government support is withdrawn too quickly, shops and businesses will not survive. Until the situation improves, retailers urgently need support on rents and negotiations with their landlords as high fees could force some physical retailers to shut for good.”
Online sales accounted for almost 62% of all retail sales in May from around 70% in April and a pre-Covid figure of around 20% in February. However Springboard’s Diane Wehrle, comments that there may be cause for optimism: “The subject on everyone’s lips is what the likely success will be of the reopening of non-essential retail on June 15.
“The limited evidence so far has suggested that, despite the growth in online shopping over the past two months, there is a huge amount of pent-up demand among consumers for bricks-and-mortar shopping.” She further added: “Inevitably, it has been smaller high streets that have been the most resilient as consumers stayed local. The key trend to be watched over the period of retail reopening in June, and over subsequent months, will be whether this signals the beginning of a new era for local high streets.
“Certainly, what is likely is that those destinations and retailers that are best able to manage customer numbers to ensure social distancing will be the most in demand by consumers as safety during shopping is paramount.”
Some experts are forecasting a surge of shoppers when the stores reopen in England next Monday. No date has been set for Scotland or Wales yet, whilst some shops in Northern Ireland re-opened yesterday.
