More retail sales took place online in the UK than ever before in April – but could not save the industry from a record fall in overall sales.
Some 30.7% of sales were completed online during the month, with online sales for individual categories growing as strongly as 38% – in household goods. But overall, shoppers spent 18% less than a year earlier, excluding petrol and diesel, and 15.2% less than in March, to buy 18.4% fewer goods than a year earlier, and 15.2% fewer goods than the previous month.
The ONS Retail Sales Index figures for April reflect a month in which non-essential UK shops were fully closed in the coronavirus lockdown. Some retailers temporarily stepped trading altogether, including 39% of department stores, 27.6% of clothing footwear and textile shops, 14.4% of household goods shops, and more than a quarter (28.7%) of specialist food shops. Food shops and non-store retailers – predominantly pureplays – that continued trading reported the highest increases in turnover.
All categories saw record proportion of sales take place online during the month – but overall sales fell, nonetheless, with clothing sales down by 50.2% in volume compared to the previous month, when they had already fallen by 34.9%. Sales at other non-food shops fell by 46% on March – the lowest level since ONS records began in 1988.
A closer look at online sales
The overall proportion of retail sales that took place online grew to 30.7% in April, from the already historically high level of 22.4% in March 2020. Overall online sales grew by 15.8% compared to the previous month.
Online food sales grew by 55.8% compared to the previous month and accounted for 9.3% of all food sales – growing quickly from 5.7% in April.
Non-food sales grew by 17.2% overall, with sales up, compared to the previous month, in all categories except clothing, footwear and textiles. Some 44.3% of all non-food retail sales took place online.
Online sales grew month-on-month at department stores (+16.9% to 37.1% of retail sales in the category), household goods shops (+38.1% to 55.5%) and at other stores (+36.9% to 42.9%). Non-store sales grew by 5%, month-on-month, and accounted for 74.5% of sales in the category.
Online clothing, footwear and textiles sales, however, fell by 14.5% on the previous month and accounted for 46.4% of sales in the category. In March 2020, 26.6% of sales took place online, and sales fell by 16.1%. More retailers in this category sold fully online (41%) than in other categories.
Industry reaction
Kyle Monk, head of retail insight and analytics at the British Retail Consortium, said: “The RSI confirms what store managers and show owners have already seen – that coronavirus continues to be a threat to the survival of shops up and down the country. Clothing stores were particularly hard hit by lockdown, with sales down almost 70% since February. Many of these stores will be relying on a successful opening in June if they are to survive. Digital sales soared, with the proportion spent online rising to three in every ten pounds. Not only were many items, ordinarily found on the high street, only available online, but many people moved to food delivery in response to the coronavirus threat.
“Retailers urgently need clarity on the reopening of shops in June. Shops need time to prepare and the certainty to do so, before they spend millions on necessary safety and social distancing measures. By getting more of retail up and running, not only can customers get all the products they need, but the industry can play its part in protecting jobs and kick starting the economy.”
Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said the lockdown caused by Covid-19 had drastically reduced retail sales across the UK.
“Whilst footfall is predictably down there are still some glimmers of hope, with online purchases and supermarket spend both providing a silver lining to the clouds that have gathered in recent weeks,” she said. “The money that consumers might usually have spent within the experience economy could also open up new revenue streams for online-based, non-essential retailers. This potential trend will be one that is closely watched, not least because it is in stark contrast to the patterns we saw developing in 2019.
“What is clear is that the lockdown has accelerated a number of structural changes in retail, with a shift to online spending the most obvious of these. In the medium to long term, retailers need to work out how to get shoppers back to physical premises in a post-Covid high street.”
Stefan Spendrup, vice-president of sales at Soti, said the news of falling sales was unsurprising – but that retailers must accommodate “what will inevitably be a radically different shopping experience and set of consumer habits”.
He added: “In-store tablets, online chatbots and virtual reality have all raised the bar when it comes to the level of experience customers expect but in a post Covid-19 world, the retail experience could be very different, with retailers having to invest to make sure they can create a safe shopping environment. Innovations such as Mobile Point of Sale (mPOS) and contactless payments which, can also alleviate any worries shoppers have about handling cash or card terminals will, at the same time, enable retailers to operate more efficiently.
“Retailers must also consider applying a mobile-first strategy across their entire on and offline operations to streamline the value chain, from supply to distribution to shop floor. Knowing exactly where items are located and in what quantities will be essential for retailers looking to sell excess stock that may now be out of season. To survive in today’s volatile and uncertain climate, it is imperative that high street retailers are agile and adapt to new changes, with technology being the key enabler.”
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