Business

Lack of demand dampens retail sales

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On a total basis sales fell by 5.9% for the four weeks to 30 May, according to the latest British Retail Consortium/KPMG Retail Sales Monitor. 

This is the second-worst decline since records began, but an improvement on April. 

UK retail sales increased by 7.9% on a like-for-like basis when compared with May 2019 and measured to exclude temporarily closed stores. 

Online non-food sales increased by 60.2% in May against a growth of 4.4% the previous year.

In-store sales of non-food items declined 50.3% on a total basis and 21.9% on a like-for-like basis for the three months to May. 

For May, the like-for-like excluding temporarily closed stores remained in double-digit decline.

Like-for-like non-food retail sales decreased by 2.1% for the three months to May. 

Chief executive of the British Retail Consortium, Helen Dickinson said: ”Sales in May demonstrated yet another month of struggle for retailers across the country, despite an improvement on the previous month. Clothing and beauty sales improved slightly on April, as people left their homes to meet outside with friends and family. 

“While the month showed record growth in online sales, many retailers will be anxious to see whether demand returns to our highstreets when non-essential shops reopen from 15 June. 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 Furthermore, there are concerns that if Government support is withdrawn too quickly, shops and businesses will not survive.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.” 

Paul Martin, KMPG’s UK head of retail, added: ”Many non-essential categories – especially fashion – continued to attract limited demand which will increase the pressure on them in the coming months. As restrictions ease, retailers have much to consider during the pandemic’s recovery-phase.

”Stores may soon have the green light to re-open but it will be a gradual affair with safety front of mind, and some doors may not reopen at all. Covid-19 has acted as an accelerant in the shift towards having less of a physical presence, not least due to the obvious need to radically reduce costs for survival. We’re also witnessing historically high levels of sales transacted online – currently over 60% – and while this will ease as more stores open, consumers have formed new habits that will see the online channel continue to be more prominent going forward.”

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