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Online logs retail growth, but broader picture shows record slump in April

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Like-for-like UK retail sales increased by 5.7% in April, however pretty much all of that growth was driven by online sales – on a total basis, UK sales slumped 19.1% against last year, the biggest fall on record according to the British Retail Consortium (BRC) and KPMG.

Closed stores, lockdown and the resulting changes to consumer shopping habits all played their part, says BRC, with food sales up 6% on a like-for-like basis in April and up 4.5% in total. This is higher than the 12-month total average growth of 1.6%. For the single month of April, food was in decline year-on-year as consumers didn’t cater for large family gatherings at Easter.

Over the three-months to April, non-food retail sales decreased by 4.4% on a like-for-like and 17.5% on a total basis. This is below the 12-month total average decline of 5.6%. For the single month of April, non-food was in decline year-on-year.

Non-food online penetration rate has increased, however, from 29.9% in April 2019 to 69.9% this April.

Helen Dickinson OBE, Chief Executive, British Retail Consortium, comments: “With lockdown measures in full swing, April saw a record fall in retail sales. Food sales were disappointing, with the virus preventing large family gatherings and turning Easter into a more modest affair. For many non-food goods, such as clothing, footwear and large household items, the decline was particularly steep as consumers responded to lockdown conditions.”

She continues: “The proportion of goods purchased online rose sharply, with products such as games consoles, bicycles, office equipment, and haberdashery, all high on the list. However, even the dramatic rise in online sales could not make up for the loss of instore purchases. Coronavirus has accelerated many of the trends seen prior to the outbreak and it is likely that as the lockdown wears on, these new shopping habits – such as the trend towards online purchases – will become more entrenched for many consumers.”

Paul Martin, UK Head of Retail, KPMG, adds: “With the nation firmly under lockdown throughout April, drastic retail sales declines were to be expected. Total sales fell a staggering 19.1% compared to last year – eclipsing any previous fall since records began – but that pain hasn’t been felt equally. So few physical stores, or indeed retailers, were open for business in the month, making like-for-like comparisons hard to establish, but the ability to continue trading or leverage online channels was beneficial for the fortunate few though.”

Martin says: “Aside from ‘essential’ retailers still operating physically, consumers have had little alternative but to log-on, and online sales were up nearly 60%. As you’d expect with consumers staying at home, the focus has been on home-related goods, as well as trying to keep entertained. Computing equipment, household gadgets, as well as toys and baby equipment were among the categories that performed strongly. Meanwhile other non-food categories, especially fashion, experienced a significant decline.”

He concludes: “The disparities in retail continue, not only between ‘essential’ and ‘non-essential’, but also between those with an online channel and those without. Eyes are firmly fixed on how the easing of restrictions will impact consumer spending going forwards, with the acceleration of online sales likely here to stay and overall demand in certain categories, like fashion, remaining subdued for some time.”

David Lloyd, General Manager, UK, Nordics and Netherlands at Alibaba Group comments: “It’s no surprise that today’s BRC figures show that retail sales have seen a record decline in April. Even as restrictions start to ease, it’s clear that there will be no quick return to normality for any sector.  The crisis has forced many retailers into much quicker adoption of new technology in order to connect with consumers. Although driven by uncomfortable necessity, brands now have an incredible opportunity to reinvent themselves and to dramatically accelerate their digital transformation. The drastic period of change we are living through will permanently alter consumer shopping habits and expectations: the brands who adapt most quickly to the current disruption, and who find new creative ways to engage with their audiences, will be the ones consumers turn to as we start to exit lockdown.”

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