Sharp Rise In Retail Sales In April

The ONS has reported on retail sales for April 2021.

• Retail sales volumes grew sharply in April 2021 with a monthly increase of 9.2%, reflecting the effect of the easing of coronavirus (COVID-19) restrictions including the re-opening of all non-essential retail from 12 April in England and Wales and from 26 April in Scotland.

• Non-food stores provided the largest contribution to the monthly growth in April 2021 sales volumes, aided by strong increases of 69.4% and 25.3% in clothing stores and other non-food stores respectively.

• Retail sales volumes were 42.4% higher than in April 2020, which was affected by the first national lockdown when the tightest restrictions were in place; however, these growth rates are distorted by base effects and are not a reliable guide; sales volumes were 10.6% higher than February 2020, before the impact of the coronavirus pandemic.

• All retail sectors reported a fall in their proportions of online sales as physical stores re-opened during the month; as a consequence, the total proportion of sales online decreased to 30.0% in April 2021, down from 34.7% in March 2021.

• In the three months to April 2021, the volume of sales increased by 2.6% when compared with the previous three months, with strong growth in department stores and automotive fuel retailers of 9.9% and 8.9% respectively.

• Online spending decreased in April 2021 by 5.6% when compared with March 2021, with a large decline in food stores of 11.4%. Feedback from retailers suggested that the easing of hospitality restrictions had affected sales in the sector. All other sectors except non-store retailers reported declines in monthly sales, while the opening of physical stores saw the proportion of retail spending online decline to 30.0% from 34.7% in March 2021.

BRC Comment:

Responding to the latest ONS Retail Sales Index figures, which showed an 35.7% year-on-year increase in overall sales (non-seasonally adjusted retail sales excluding fuel: J3L2), Helen Dickinson, Chief Executive of the British Retail Consortium, said:

“The ongoing easing of coronavirus restrictions has meant a second month of sales growth, offering a welcome boost for thousands of retailers in England and Wales. Pent-up demand built up during lockdown continues to be released as the reopening of ‘non-essential’ retail offered the public a welcomed opportunity to visit many of their favourite shops. Improved weather during April meant greater sales of fashion, particularly in outerwear and knitwear, as the public renewed their wardrobe and made plans to meet friends and family outdoors. Online sales also continued to perform strongly, rewarding those retailers who had invested in their online and delivery operations during the pandemic.

“While the figures are a step in the right direction after many months of retail closure, demand remains fragile. Footfall is still down by 40% on the pre-pandemic period, and there are still 530,000 people who work in retail still on furlough. The end of the full business rates relief in England poses a significant threat to retailers who have spent well over a billion pounds on Covid-secure measures aimed at protecting staff and customers. The Government must deliver on its promise to reform the broken business rates system in their ongoing review. By doing so, the industry will be able to make essential investment in improving their digital offering and breathing new life into our high streets and town centres.”

PWC Comment:

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

“Today’s retail sales announcement measures the first three weeks post-reopening of non-essential shops in England and Wales. So while it’s great that overall sales were up around 40%, the results are against the start of the first national lockdown.

“On a seasonally adjusted basis, sales growth of over 12% compared with the last pre-pandemic month of ‘normal’ trading last February shows the extent of pent-up demand amongst consumers, and reflects the bounceback in consumer sentiment that we recorded in our latest survey.

“There was good news across every category of retail, but particular relief for fashion retailers, which have been the hardest hit category of the high street, with a 27% decline in sales in 2020, and which did not benefit from previous ‘unlockings’.

“Fashion sales recovered sharply in April, exceeding pre-pandemic levels for the first time, as consumers stocked up on new outfits in anticipation of going out. Warm and weatherproof clothing also proved popular with hospitality reopening outside and the weather proving unpredictable.

“Even supermarket sales were still up on last April, despite falling back slightly vs March, reflecting the fact that indoor hospitality was yet to open last month and many of us were starting to entertain in our homes and gardens. We expect grocery demand to fall back as restaurants and pubs reopen fully in the coming months.

“And the good news for high streets is that there’s no sign of a permanent shift to online shopping, with the proportion of internet sales dropping from a high of 34.7% in March down to 30% as shops re-opened their doors.

“Retailers will be hoping that this momentum continues into the rest of Spring and Summer, as Britain continues to unlock and consumer confidence builds with warmer weather and the continued rapid rollout of vaccines.”

Source : ONS, BRC, PWC

Image : Jason Batterham / Shutterstock.com (671551474)

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