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Almost 40% of retail sales take place online in May, suggesting shoppers may continue to do more of their shopping over the internet post-Covid-19

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Almost 40% of retail sales take place online in May, suggesting shoppers may continue to do more of their shopping over the internet post-Covid-19

Almost 40% of retail sales took place online in May – the first full month in which non-essential UK shops were able to trade, according to BRC figures out today.

 

That’s well below the 61.5% of retail sales that took place online last May, when shops were closed in the first UK Covid-19 lockdown. But it’s also significantly higher than the 31.4% of sales that were online in May 2019 – the year before the pandemic emerged. This suggests that a greater share of retail sales may now taking place online than before Covid-19, even now that shops are able to trade once more – and that shoppers may continue to make a greater proportion of their retail purchases online in the future than before the pandemic.

 

Total retail sales grew by 10% in total in May compared to May 2019, according to today’s BRC-KPMG Retail Sales Monitor for the month. The index will this year compare sales against two years ago, excluding the Covid-19 lockdown disruption seen throughout much of 2020. On a like-for-like (LFL) basis, that strips out the effect of store – and business – openings and closures, UK retail sales increased by 23.7% on May 2019.

 

Online non-food sales grew by 39.1% in May, compared to the same month in 2019. May 2021 was the first month in which retail was fully open since the end of the third lockdown. This figure contrasts with the longer-term trend, since over the last three months online sales grew by an average of 64.4% a month.

 

In-store non-food sales, meanwhile were 16.7% down in total in May compared to the same month in 2019 – when total sales had fallen by 3.1% – but grew by 27.1% LFL.

 

Helen Dickinson, chief executive of the British Retail Consortium (BRC), says: “Retail sales were buoyant in May thanks to the reopening of hospitality, coupled with the afterglow of non-essential retail’s own return. Pent-up demand for the in-store shopping experience, as well as the first signs of summer weather, helped retail to the strongest sales growth of the pandemic.”

 

She says that furniture and homewares benefitted as shoppers had the chance to touch and feel goods in-store, while clothing and footwear sales grew for the second consecutive months as social restrictions eased and the weather improved. Shopper confidence, she says, is supported by retailers’ own investment in safety measures.

 

“Large cities have been hardest hit by the pandemic, with so many people still working from home and footfall remaining considerably down as shoppers increasingly choose to shop local. Now is the time to consider what our future high streets and town centres will look like a decade from now,” says Dickinson. “We must adapt to these changes, not only to build back better but also to build forward. With vacancy rates still rising in many parts of the country, we must reimagine how we integrate residential and commercial property, allowing us to build stronger local communities that encompass leisure, retail, services, and homes. This will require retailers, property developers and local government to work together and plan city centres that cater to these changing demands and truly innovate the high street model.”

 

Food sales grew by 9.8% in total in May and by 10.2% LFL.

 

Paul Martin, UK head of retail at KPMG says: “Although some spend has migrated to high street, there was still high penetration of online spending in May reinforcing the view that the pandemic has seen a step up in online activity as some consumers maintain their use of this channel out of habit and choice and some remain nervous about venturing back into stores.

 

“Retailers now face an interesting few months as they assess how they best entice their customers back to stores and what the right blend of offline and online will be as spending patterns settle in a post Covid world. With the prospect of the full lifting of Covid restrictions coming into force this month, there will be increased competition for share of wallet as consumers focus on those leisure and hospitality activities that have been denied to them due to lockdown. It is a summer that starts with cautious optimism for many retailers, who will be hoping that the continued success of the vaccine roll-out and an improving economy will offer scope to spark a big surge in consumer spending.”

 

Barclaycard rise in consumer spending in May

 

Meanwhile, Barclaycard figures saw consumer spending rise by 7.6% in May, compared once more to the same month in 2019. That, says the credit card company, is the highest growth since coronavirus restrictions began and suggests that more people went out to shop and socialise.

 

The figures show essential spending (+11.4%) rise in locations including supermarkets (+17.7%) and at local food and drink specialist retailers (+69.3%) such as butchers and independent convenience stores. They also spent on clothing (+8.5%) and at pharmacy, health and beauty shops (+17.8%), while taking their families on days out and buying from sports and outdoor retailers.

 

Barclaycard sources its data from its processing of nearly half of UK credit and debit card transactions. A parallel survey found that 68% of respondents said they were comfortable spending time with family and friends outdoors, and 61% are happy to do so indoors.

 

Consumer confidence in the economy and household finances is also higher than this time last year, holding up at 35% and 72% respectively, compared to 20% and 67% in May 2020.

 

Raheel Ahmed, head of consumer products at Barclaycard, says: “May was a positive month for a range of categories, with the nation clearly determined to show support for retailers and local businesses. As friends and families reunited after months apart, it is reassuring to see signs of recovery for the entertainment and hospitality industries, both of which have faced significant challenges over the past year.

 

“While international holidays continue to be hampered by restrictions, staycations in the UK are providing a welcome boost to the travel sector, as May saw more holidaymakers, particularly in the older age groups, book or embark on trips. With summer – and hopefully more of this warmer weather – on the way, we hope to see these positive trends continue as Brits make the most of their newfound freedoms.”

 

 

 

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