UK retail sales began to rebound in May which was expected after the nationwide lockdown. The good news is that they exceeded expectations by rising 12 per cent month-on-month following expected record plunge in April, but the proportion of this spend was online as online sales hit a record high. Great news for the economy as a whole but the companies that need the real support are the local shops and services in this sector that have need a huge rise in business just to stay afloat. #saveourshops
The sector had been expected to rebound 6.3 per cent in May after retail sales tumbled a record 18.1 per cent in April, so the rise is almost double the predicted amount.
Non-food stores reported increases in sales volumes in May after falling sharply in April as many stores paused trading due to lockdown
“May’s recovery in retail sales should not be interpreted as a sign that the economy is embarking on a healthy V-shaped recovery from Covid-19,” said Pantheon Macroeconomics’ Samuel Tombs.
He added that household incomes “likely won’t spring back as the economy gets moving again over the coming months”, with the winding up of the coronavirus job retention scheme set to hit incomes as some of the nine million workers on furlough are let go or have their hours cut.
Year-on-year retail sales still show a bleak picture with the difference still -13.1 per cent, but this has improved from -22.7 per cent in April.
Non-food stores provided the biggest boost to monthly sales in May, and it was household goods stores that led the way recording a 42 per cent increase in sales as hardware stores began to reopen and consumers queued up to purchase products for DIY projects.
The proportion of spent online soared to a new record high of 33.4 per cent of total sales in May, rising from 30.8 per cent in April and this increases was across most store sectors in May.
“Given the wholesale shifts in consumer behaviour these last few months, it would be optimistic to assume shopping habits will return to normal in the immediate future,” said Lynda Petherick, head of retail for Accenture UK.
“The industry remains in survival mode,” said Richard Lim, chief executive of Retail Economics.
“Our research showed 8 in 10 retailers are considering making redundancies while half are considering store closures in a range of cost-saving measures,” he continued.
“As the Government begins to withdraw support for businesses and households, the true cost of the pandemic will begin to emerge.”