It will be a matter of some relief to those involved in the retail sector in the UK that sales practically recovered in June from their staggering drops during the country’s coronavirus lockdown. According to official data from the Office for National Statistics (ONS), the volume of retail sales jumped 13.9 per cent from May to June as shops and non-essential stores opened their doors to customers once again following a lockdown that started on March 23.
Non-food store sales rocketed month on month in June, and fuel leapt 21.5 per cent. But levels were still impacted by the plunges experienced in March and April during lockdown. Supermarkets hit new highs in June with food sales 5.3 per cent higher. And online shopping was 53.6 per cent higher than in February – just before the pandemic hit the UK.
The proportion of UK retail sales taking place online slipped slightly from a record 33.3 per cent in May to 31.8 per cent in June. But that was much higher than the 20 per cent ratio reported in February.
“The retail sector bounced back as the reopening of shops released pent-up demand for some retailers,” Richard Lim, CEO, Retail Economics, said. “But the recovery is being felt unevenly across the sector with clothing retailers remaining under significant pressure.
“Some consumers searching to break the monotony of being at home headed for the high street, but numbers remained considerably lower than pre-COVID level. UK retail sales enjoyed a sharp V-shaped recovery in June, ONS data showed.”
Jeremy Thomson-Cook, chief economist at currency exchange firm Equals Money, also said the retail sector enjoyed a V-shaped recovery in June. But he warned the initial bounce back will fade away, leaving Brits waiting to see the true extent of the damage lockdown has caused.
“There were a number of driving forces at play which saw sales rise; pent up demand following an easing of lockdown conditions, a lack of alternatives, good weather and the furlough scheme still running at full steam,” he said.
“All four of these driving forces are likely to dwindle in the coming months and that’s when we’ll see just how strong demand is. At that point the economy will have to deal with the triple cocktail of uncertainties that an end to the furlough scheme, a winter wave of COVID-19 cases and Brexit all represent.”
Ruth Gregory, senior UK economist at Capital Economics, said online spending exaggerated the extent of the recovery of UK retail sales in June. “Since the sector has benefited disproportionately from online spending and a switch away from other types of spending, this overstates the extent of the recovery in the wider economy,” she said.
Still, the recovery in UK retail sales impressed economists. Sales sank 22 per cent at their nadir during April’s lockdown. But a 45.5 per cent June surge in non-food products left UK retail sales just one per cent below their pre-pandemic level.