NEWS

UK retail sales rise above pre-Covid levels as lockdown eases

Published on: 24th August 2020

Retail sales in the UK have recovered more robustly than many other parts of the economy, with the help of online sales.

UK retail sales

Officials figures show that UK retail sales rose above pre-pandemic levels in July, which was the first full month non-essential shops in England were allowed to reopen.

Indicating an increased appetite to travel to work and shop on the high street since the easing of the lockdown in May, sales increased to higher levels than in February, before lockdown.

The value of sales increased by 4.4% and volume sales by 3.6% compared with June, despite a fall in the sale of food that the Office for National Statistics (ONS) said could be attributed to shoppers purchasing more restaurant meals.

In response to increased high street footfall, internet shopping experienced a slight dip last month, however sales online remained more than 50% higher than in February and helped push overall retail sales above pre-pandemic levels for the first time.

Household goods stores and other non-food stores experienced the sharpest recovery, increasing sales by 6% and 2.2% respectively above their February 2020 levels. When compared with February 2020’s pre-pandemic level, total retail sales were 1.7% and 3% higher in value and volume terms respectively.

However, sales in the three months to July remained below the same period last year, with a fall of 5.3% for value sales and a fall of 4.1% for volume sales.

Howard Archer, the chief economic adviser to the EY Item Club, commented: “Retail sales clearly benefited in July from a full month of non-essential retailers being allowed to open. Retail sales were also likely helped in July by the opening up of pubs, restaurants and hairdressers pushing up footfall. However, the opening up of the hospitality sector and other consumer service sectors may have diverted some consumer spending away from retail sales towards services.”

Retail sales, which account for 5.4% of GDP, have rebounded more robustly than many other parts of the economy, though mostly through online sales.

Earlier this month, official figures confirmed that the economy was in recession after a slump in GDP of 20.4% in the second quarter that followed a 2.2% fall in the first.

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