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Record online retail performance helps UK GDP recover by 15.5% in the third quarter from Covid-19 impact

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Record online retail performance helps UK GDP recover by 15.5% in the third quarter from Covid-19 impact

Record online retail performance has helped the UK’s GDP to recover by 15.5% in the third quarter of the year, compared to the previous quarter. Non-food stores also saw business grow strongly.

 

The Office for National Statistics today estimated that UK GDP (gross domestic product) grew by a record 15.5% n the third quarter of the year, compared to the previous quarter – the largest growth since its quarterly records began in 1955. But this is a recovery from a low base – following the impact of the coronavirus pandemic and a 22.5% fall in second quarter GDP. Output is still 9.6% lower than in the third quarter last year.

 

Today’s quarterly rise in GDP comes as the services, production and construction sectors have seen “record” increases in output during the quarter – including 30.7% growth in the wholesale and retail trade and repair of motor vehicles and motorcycles category. In this category, which includes ecommerce and multichannel retail, output is now higher than it was in the fourth quarter of 2019.

 

The ONS says in today’s GDP first quarterly estimate for the UK between July and September: “This has mainly reflected the reopening of car showrooms and significant pent-up demand. There was also a recovery in retail trade in the third quarter because of strong growth in non-food stores and a record proportion of online sales.” In June, 31.8% of sales took place online according to ONS figures. The BRC says that 50.1% of non-food sales were online in June, up from 33.1% a year earlier. Although that subsided to 27.5% by September, that was still well ahead of the 20.1% of retail sales that took place online a year earlier.

 

Household consumption grew by 18.3% during the quarter, compared to the previous, although it is still 12.4% below the fourth quarter of 2019. Areas where shoppers spent more included clothing, footwear, furniture and household equipment. The report also cites the “record” 17.4% rise in retail sales volumes seen in the three months to September 2020, according to the latest ONS Retail Sales Report, and says non-store retailing sales were 36.6% higher, by volume, in September than they were in February. This, it says, reflects “the ongoing shift to online shopping since the start of the pandemic.” Online demand reflects the move to working from home and generally spending more time at home – in categories from home office products to electronics, household goods, furniture and garden products.

 

The ONS says today’s GDP estimate “reflects some recovery of activity following the record contraction in Quarter 2 (April to June 2020)” but that “the level of GDP in the UK is still 9.7% below where it was at the end of 2019.” But it also warned that its estimates were more uncertain than usual, as a result of the pandemic.

 

 

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