Online slows in July as retail sales surpass pre-pandemic levels

UK online retail sales fell 7% month-on-month in July as the reopening of non-essential stores took effect, ONS figures published today have shown. Nevertheless, eCommerce spend remained high, with sales on this platform still 50.4% higher than in February prior to the Covid-19 pandemic.

And online as a proportion of all retail sales was 28.9% in July, still significantly higher than February levels of 20%. This was lower than in June however, when eCommerce represented 31.9% of all retail sales.

The month-on-month decline in online sales was observed across all categories, especially department stores (18.5%), household goods (17.3%), and textile, clothing and footwear (11.2%). In food, online sales fell by 6%.

Encouragingly, overall retail sales in July were 3% higher than recorded in February, and grew by 3.6% compared with June as the sector continues to recover. This is despite the news this month that the UK has officially entered into a recession following two consecutive quarters of GDP decline.

Sales in household goods stores increased by 6% in July compared with pre-pandemic levels in February, although total non-food sales were 6.6% lower, which is mainly due to a slow recovery in clothing sales, which were 25.7% lower in July compared with February.

While total food sales fell 3.1% month-on-month in July, they were still 2.4% higher than in February. The ONS added that the month-on-month fall is likely to be due to the reopening of restaurants and bars from 4 July.

Commenting on the data, Lynda Petherick, head of retail for Accenture UK and Ireland said: “July marked another month of progress for the retail sector and an important symbolic milestone as sales climbed above pre-pandemic levels. Recent impressive online sales began to taper slightly, however many retailers will hope that this reflects that normal service may be resuming.”

Earlier this week, data from Kantar and Nielsen showed that the shift to online grocery shopping in the crisis continued in July.