Early Christmas shopping drives retail sales

Retail sales in September increased 6.1% like-for-like showing shoots of recovery for the industry.

According to the BRC-KPMG retail sales monitor, over the three months to September, in-store non-food sales declined 9.5% on a like-for-like basis, while food sales increased 5.1%. Overall non-food sales increased 5.2%, with online non-food specifically increasing 39.7% over the three month average pinpointing the increased trend to shop safely online during and post-lockdown.

“September saw a big improvement in retail sales growth, however sales over the last six months are still down on the previous year,” explained Helen Dickinson, CEO, British Retail Consortium.

Dickinson pointed to clothing and footwear sales which have remained low, while electronics and household goods are selling strongly as consumers continue to work from home.

“September sales have also given retailers early signs that consumers are starting their Christmas shopping earlier this year, which retailers are encouraging their customers to do in order to manage demand at Christmas and keep people safe,” she said.

“The industry is beginning to recover, however, forced store or warehouse closures during any future lockdowns could put paid to this progress. Retailers have invested hundreds of millions in making their premises Covid-secure, with perspex screens, social distancing, additional staff and hygiene measures. The industry also provides essential employment for three million workers in the UK and is already helping to contribute to the economic recovery.”

Paul Martin, UK head of retail at KPMG, added: “The resilience of British retailers has been nothing shy of remarkable in recent months.”

He noted: “This month’s uptick is against the woeful performance recorded in September 2019 and so caution remains vital. Last year, the prospect of a no-deal Brexit loomed over purchasing decisions dampening demand, but now that same prospect is accompanied by the recent resurgence of Covid-19 numbers. Combined, these factors could have a significant impact on retail growth over the next months.

“As we enter the all-important ‘golden quarter’ – when many retailers make the majority of their annual revenue – the fight for survival couldn’t be more intense. Close attention has to be paid to how players choose to tackle key events, like Black Friday, within a consumer landscape that has changed entirely.”