ONS: Retail Sales Boost For June

The ONS has reported on retail sales for June.

• Retail sales volumes increased by 0.5% between May and June 2021, and were up 9.5% when compared with their pre-coronavirus (COVID-19) pandemic February 2020 levels.

• The largest contribution to the monthly increase in June 2021 came from food stores where sales volumes rose by 4.2%, with anecdotal evidence suggesting these increased sales may be linked with the start of the Euro 2020 football championship.

• Non-food stores reported a fall of 1.7% in sales volumes in June 2021 when compared with May 2021, driven by falls in household goods stores, such as furniture stores and clothing stores.

• Household goods stores reported a monthly fall in sales volumes of 10.9% in June 2021, driven by falls in furniture stores and electrical household appliance stores. The Bank of England Agents’ summary of business conditions for Quarter 2 (April to June 2021) notes that transportation delays have resulted in shortages of some items, such as furniture and electrical goods.

• Despite this fall, sales volumes for household goods stores are still 14.0% higher than the same period last year and 15.8% above their pre-coronavirus (COVID-19) pandemic levels in February 2020. 

• Other non-food stores (such as chemists, toy stores and sports equipment stores) reported monthly growth of 8.6% driven by strong growth in second-hand goods stores.

• Clothing and department stores also reported monthly declines, of 4.7% and 3.6% respectively.

• Automotive fuel sales increased by 2.3% over the month, as people continued to increase their amount of travel; however, they remain 2.1% below their pre-coronavirus pandemic February 2020 levels.

• The volume of sales for the three months to June 2021 was 12.2% higher than in the previous three months, driven in large part by particularly strong sales in April when non-essential retailing re-opened; strong three-month growth was seen in non-food retailers and automotive fuel sales of 35.8% and 23.6% respectively.

• The proportion of retail sales conducted online remains substantially higher than before the pandemic, but in June most retail sectors reported a fall in their proportions of online sales as consumers returned to physical stores; the total proportion of sales online decreased to 26.7% in June 2021, down from 28.4% in May 2021.

• Online spending values fell in June 2021 by 4.7% when compared with May 2021, with all sectors except clothing stores reporting monthly falls in their online sales. Feedback from retailers suggested that the easing of retail restrictions had affected online sales as consumers returned to physical stores.

• This resulted in a decline in the proportion of online retail spending values, which fell to 26.7% from 28.4% in May 2021. This is the fourth consecutive monthly fall in the proportion of online spending. However, this is higher than the proportion of online retail spending in February 2020 (pre-coronavirus (COVID-19) pandemic) of 19.9%.

Commenting on the Office of National Statistics retail sales figures for June 2021, Lisa Hooker, consumer markets leader at PwC, said:

“British consumers have continued to drive strong retail demand in June, with a 1.4% increase in sales excluding fuel vs. May, and a 12.1% increase compared with the last normal month before the pandemic - last February.

“The first full month of reopening for indoor hospitality was always going to be make or break for the retail sector, and we’ve seen both increased footfall for the high street, with online sales at their lowest level (26.7%) since the start of the pandemic, and, perhaps surprisingly, a boom in demand for grocery.

“The combination of both food and drink sales to supporters celebrating the home teams’ successes at the Euros and record high consumer sentiment levels - according to PwC’s latest survey - seem to have particularly benefited June’s results.

“However, headline growth masks declines in other non-food categories, with household goods sales suffering their first non-lockdown driven decline since the start of the pandemic, as people started to spend more time out of the home; and sales in the hardest-hit clothing category again slipping below pre-pandemic levels.

“So the post-pandemic retail recovery will likely remain fragile for the rest of the summer, as government support schemes begin to wind down, and the booming grocery sector sees operational and supply challenges from the current ‘pingdemic’.

“And while the summer heatwave may still be on the mind of consumers, retailers will already be well into their planning for the rest of the year, including the critical Christmas peak. They will be hoping the initial post-lockdown momentum and pent-up demand continues for the rest of 2021.”

Source : ONS, PWC and Insight DIY

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