UK retail sales continue recovery in July, boosted by online

UK retail sales grew for the second month running in July, heavily boosted by a continued shift to eCommerce despite the reopening of physical stores.

This is according to the latest BRC-KPMG retail sales monitor, which showed retail sales increased by 3.2% in the four weeks from 5 July to 1 August. This follows a 3.4% rise recorded for June, painting a more positive picture for the industry after the devastating impact of the Covid-19 lockdown.

There was a continued surge in eCommerce in this period, with online non-food sales increasing by 41%. This represents a slight reduction on the three-month average of 49.7%, likely due to July being the first full month in which physical shops reopened. The monitor also showed that the non-food online sales penetration rate rose from 29.7% in July 2019 to 42% this July.

In the three months to July 2020, in-store sales of non-food items fell by 29.3% on a total basis, impacted by the closure of non-essential shops for 12 weeks from 23 March. But food sales grew by 6.1% on a total basis, which is the highest rate of growth since June 2009.

Paul Martin, UK head of retail at KPMG commented: “While social distancing restrictions have eased and our daily lives have started to return to a degree of normality, shoppers are still focussed on life at home for the most part. Online sales continue to remain prominent – accounting for over 40% – while food and home focussed categories like furniture, homewares and kitchen accessories remained among the strongest performers. With many of us continuing to work from home, sales of computing equipment soared too.”

Helen Dickinson OBE, chief executive of the British Retail Consortium (BRC) cautioned that the retail sector remains in a challenging position: “While the rise in retail sales is a step in the right direction, the industry is still trying to catch up lost ground, with most shops having suffered months of closures. The fragile economic situation continues to bear down on consumer confidence, with some retailers hanging by only a thread in the face of rising costs and lower sales.”

Earlier today, Barclaycard revealed it had observed a “significant improvement” in non-essential spending in July.

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