Retail

UK retail sales bounce back in June close to pre-coronavirus levels


UK retail sales rebounded in June close to pre-pandemic levels, according to official figures, as non-essential shops reopened in England and Wales.

The Office for National Statistics said the volume of retail sales increased by 13.9% when compared with May 2020, with the British high street gradually recovering from the sharpest decline in consumer spending on record.

Raising hopes for a faster economic recovery from the coronavirus outbreak than initially feared, rising sales volumes in May and June brought total spending back closer to pre-crisis levels. Sales last month were down by 0.6% compared with February, before harsh restrictions forcing the closure of shops were brought in to stop the spread of the disease.

However, the ONS warned there was a mixed picture for different store types, as some shops continue to struggle from depressed consumer demand.

Online spending, DIY and food sales fuelled the increase in consumer spending in June, with shoppers continuing to buy more food than usual while cafes, restaurants and pubs remained shut last month.

Clothing sales, however, remain depressed despite the reopening of clothes stores from the middle of last month. Across the high street, the ONS said sales in non-food stores remain about a third below pre-pandemic levels.

The figures come amid intense pressure for retailers, as growing numbers of major high street chains announce job cuts and store closures, including John Lewis, Boots and Marks & Spencer.

Despite continuing pressure in some areas, the latest snapshot showed electrical, DIY and furniture sales all snapped back to similar levels as before the pandemic, as home improvements during lockdown helped boost consumer spending.

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As the high street reopened, online spending as a proportion of total sales fell slightly – dropping from 33.3% in May to 31.8% in June. However, online sales still remain significantly higher than before the pandemic, when they accounted for about 20% of overall spending.

Economists warned the rapid rebound in retail sales was probably unrepresentative of the wider economic picture, as retail sales typically only account for about a third of overall household expenditure.

Ruth Gregory, the senior UK economist at the consultancy Capital Economics, said: “Since the sector has benefited disproportionately from online spending and a switch away from other types of spending, this overstates the extent of the recovery in the wider economy.”



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