Retail sales rise despite lower high street footfall

Published on: 11th August 2020

Retail sales rose for the second consecutive month in July, up 3.2% compared with the same month last year.

Retail sales

It has been reported that retail sales rose again in July, though industry body figures show the number of visits to high streets is still down significantly as many people are still opting to shop online instead.

According to the British Retail Consortium (BRC), retail sales rose for the second consecutive month in July, up 3.2% compared with the same month last year, however the picture for retailers was mixed.

Food sales continued to be strong, while furniture and homeware sales also did well as people “increasingly invest in their time at home”, the BRC-KPMG retail sales report found. Online shopping remained “prominent” in July, accounting for 40% of sales, said Paul Martin, UK head of retail at KPMG. Computer sales also continued to soar with more people working from home.

But many British shops are still facing major hardships following the coronavirus lockdown. BRC chief executive Helen Dickinson added: “While the rise in retail sales is a step in the right direction, the industry is still trying to catch up lost ground, with most shops having suffered months of closures. The fragile economic situation continues to bear down on consumer confidence, with some retailers hanging by only a thread in the face of rising costs and lower sales.”

The unwinding of the government’s furlough scheme could also make consumers less willing to spend, even during the back to school period which usually drives higher sales volumes. Furthermore, new data from Visa suggests that consumer confidence has been further knocked by difficulties in getting a refund, with 1 in 10 people yet to get their money back for purchases made during lockdown. Consequently, more than a third of consumers say they are avoiding making a big purchase over fears their money would not be returned if they needed a refund.

Separate figures from market intelligence firm Springboard suggested a 40% drop in footfall in July, which was still an improvement from June, and the best result since February.

Going forward, online spending is unlikely to decline, said Springboard, while a lack of tourism, more people working from home and rising unemployment are other factors keeping people away from shops. Springboard figures for the beginning of August suggest footfall rising during the government’s Eat Out to Help Out scheme.

The BRC has repeated a call for a government grant to help pay rents. The Ministry of Housing, Communities & Local Government said that government support was already available for landlords, and that there was a moratorium on landlords being able to evict commercial tenants for non-payment of rent until 30th September. There were also temporary measures to protect businesses from “aggressive” rent recovery, it added.


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