UK retail spending returns to pre-pandemic levels — but a 15.9% drop in clothes sales show the recovery is 'deceptive,' one expert says
- British shoppers bought 15.9% fewer
clothesin August than in February, according to new data published Friday.
- Household goods stores are selling more than they did before the pandemic as the home-renovation boom continues, and overall retail
salesare slightly higher than they were in February.
- Marc Ostwald, chief economist at ADM Investor Services, said that while this suggests a "robust recovery in consumer spending" on the surface, this is "deceptive," and
retailjob cuts will continue.
British shoppers have drastically cut back on clothes purchases since February, making
Clothes sales in August were 15.9% below their levels in February, before the UK went into lockdown.
Overall retail sales have returned to pre-pandemic levels — in total, British shoppers spent 0.7% more in August than in July, and 2.5% more than February, the ONS data showed. This was fueled by a home-improvement boom: Sales-by-volume in household goods stores were 9.9% higher than in February, the ONS reported.
Marc Ostwald, chief economist at ADM Investor Services, said that this suggests a "robust recovery in consumer spending" on the surface — but the figures are "deceptive," he said. Sales in bricks-and-mortar stores have plummeted, and "considerable further job losses" will follow, he added.
Separate data from the Retail Sales Inquiry and the Business Impact of Coronavirus Survey showed that fewer customers were
Online sales and footfall are both falling
Online sales are dropping across most sectors, though they still remain much higher than before the pandemic. For every £100 shoppers spent in August, £28 of this was spent online, ONS data shows. This is 2.5% less than in July, but still more than 50% higher than this time last year.
After "other stores," the sector that saw the highest drop in online sales other than clothing was food, the ONS reported. Online food sales were nearly 5% down in August compared to July as customers returned to supermarkets — but British shoppers are still spending nearly twice as much on grocery deliveries than last year.
Total food sales across both online and physical stores fell by around 2% from July to August. Britain's "Eat Out to Help Out" scheme – which saw diners eat more than 100 million meals out in August as part of a government-subsidized scheme to boost the hospitality industry – caused supermarket sales to plummet by £155 million ($201 million) in August, research by data company Kantar shows.
Footfall data from Springboard suggests that the number of shoppers visiting physical stores also fell. In the week starting 7 September, around 28% fewer shoppers visited bricks and mortar stores than the same time a year ago, compared to just a 25% decrease during the two weeks before that.
Ostwald, from ADM Investor Services, said that the migration from bricks and mortar retail to online, and reduced spending on non-retail recreation and leisure activities, "will likely result in considerable further job losses, especially with escalating reintroduction of lockdown measures."
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