Retail Sales Monitor
Strong Retail Sales Despite Competition
Helen Dickinson OBE, Chief Executive, BRC:
Retail sales were buoyant in May thanks to the reopening of hospitality, coupled with the afterglow of non-essential retail’s own return. Pent-up demand for the instore shopping experience, as well as the first signs of summer weather, helped retail to the strongest sales growth of the pandemic. Furniture and Homeware sales continued to perform well as consumers were able to see and feel items instore, while Clothing and Footwear saw their second consecutive month of growth due to the warmer weather and easing of social restrictions. There is a growing sense of consumer confidence, boosted not only by the widespread uptake of vaccinations and testing, but also retailers’ own significant investment in safety measures.
Large cities have been hardest hit by the pandemic, with so many people still working from home and footfall remaining considerably down as shoppers increasingly choose to shop local. Now is the time to consider what our future high streets and town centres will look like a decade from now. We must adapt to these changes, not only to build back better but also to build forward. With vacancy rates still rising in many parts of the country, we must reimagine how we integrate residential and commercial property, allowing us to build stronger local communities that encompass leisure, retail, services, and homes. This will require retailers, property developers and local government to work together and plan city centres that cater to these changing demands and truly innovate the high street model.
Don Williams, Retail Partner, KPMG:
The rain in May failed to dampen consumer demand and shoppers continued to return to the high street. Clothing retailers were the biggest beneficiaries of pent up demand, clocking up increases of over 100% as an easing of restrictions saw stores reopen and social events slowly come back on the agenda. Consumers also splurged on new jewellery, footwear and home accessories, with sales registering triple digit growth against last year, when lockdown measures were in place. Although some spend has migrated to high street, there was still high penetration of online spending in May reinforcing the view that the pandemic has seen a step up in online activity as some consumers maintain their use of this channel out of habit and choice and some remain nervous about venturing back into stores.
Retailers now face an interesting few months as they assess how they best entice their customers back to stores and what the right blend of offline and online will be as spending patterns settle in a post Covid world. With the prospect of the full lifting of Covid restrictions coming into force this month, there will be increased competition for share of wallet as consumers focus on those leisure and hospitality activities that have been denied to them due to lockdown. It is a summer that starts with cautious optimism for many retailers, who will be hoping that the continued success of the vaccine roll-out and an improving economy will offer scope to spark a big surge in consumer spending.
Food & Drink sector performance, Susan Barratt, CEO, IGD:
A combination of the long-awaited improvement in the weather, the late bank holiday, and the Champions League final, all served to deliver a boost to food and drink sales at the end of May. Despite this, food and drink sales throughout the month faced persistently high comparatives with 2020, when we were in the first national lockdown. While its unlikely performance will exceed, or even match 2020 for months to come, sales are still significantly elevated compared to 2019, suggesting that food and drink continues to benefit from an ongoing ‘pandemic effect’.
IGD’s Shopper Confidence Index remains strong, with further lockdown restrictions easing and two bank holiday weekends contributing to a positive outlook for shoppers. Financial confidence is helping to maintain these stronger levels, with fewer than one in five shoppers (19%) expecting to be worse off in the year ahead, which is a record low.
TO DOWNLOAD THE FULL REPORT PLEASE SIGN IN
Only members and associate members can access this exclusive insight.