Covid-19: BRC sees worst retail sales since records began

UK retail sales have continued to plummet as the Covid-19 crisis has developed, according to the latest figures from the BRC-KPMG Retail Sales Monitor.

Figures from the long-running index showed that, on a total basis, sales decreased by 4.3% in March, compared to a drop of 1.8% in March 2019. Sales at this time last year were depressed by political uncertainty over Brexit, so the recent drop marks a substantial downturn. Excluding distortions it is the worst decline recorded since the monitor launched in January 1995.

The impact of the lockdown can be seen clearly, according to the figures. In the first three weeks of March retail sales grew by 12% – possibly partly driven by stockpiling – while they dropped by 27% for the remainder of the period.

Over the three months to March, in-store non-food sales declined 13.0% on a total and like-for-like basis. This is worse than the 12-month total average decline of 6.1% and comes as a result of the closure of “non-essential” stores.

“In March, the necessary measures to fight the spread of coronavirus led to the worst decline in retail sales on record. Furthermore, the headline figure masked even more dramatic swings: food and essentials faced an unprecedented surge in demand in the early part of March, only to drop significantly into negative growth after the lockdown and introduction of social distancing in stores," said BRC chief executive Helen Dickinson OBE.

"The closure of non-essential shops led to deserted high streets and high double-digit declines in sales which even a rise in online shopping could not compensate for. Sales of computers and accessories, board games, and fitness equipment all rose sharply as a result of the move to home-schooling and work-from-home. In contrast, demand for the latest fashion ranges significantly declined."

She said the retail industry will feel the repercussions of coronavirus for a "long while yet".

"Many physical non-food retailers have been forced to shut down entirely or to limit themselves to online only to protect customers and staff. Consequently, hundreds of thousands of jobs at are risk within these companies and their supply chains. At the same time, supermarkets brace themselves for lower sales, while still spending huge sums on protective measures, donating to food banks and hiring tens of thousands of temporary staff. We welcome the government’s actions to date, yet millions of livelihoods rely on their continued support.”

KPMG UK head of retail Paul Martin, added: “Lock down has prompted a fundamental rethink of what is deemed essential. Total sales may ‘only’ be down 4.3%, but the sharp divide between food and non-food, and between physical and online, is far more drastic. Also, the UK’s closure of non-essential stores only started at the backend of the month, so it’s likely worse data is yet to emerge.

"An uncertain future lies ahead and the industry’s reset button has clearly been pressed. Smart retailers will already be thinking about what this means for the future, but the resilience of the sector cannot be underestimated. Likewise, we cannot overlook the huge contribution many retail workers have made to help the nation during the crisis.”

IGD CEO Susan Barratt said grocery retailers have faced an unprecedented challenge to ensure supplies to customers and vulnerable groups. “Shoppers are recognising and appreciating these efforts, with trust in the food industry to support local communities up by 4% from February."

She said: "As well as tackling the immediate challenges of the Coronavirus (Covid-19) impacts, retailers need to have an eye on the future. Our data shows a significant decline in shopper financial confidence, with 39% expecting to be worse off in the year ahead compared to 27% in February, indicating the rest of 2020 may be a bumpy ride for many.”

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