Daily Management Review

Retail Spending In The UK Bounces Back In June To Near Pre-Lockdown Levels


Retail Spending In The UK Bounces Back In June To Near Pre-Lockdown Levels
With non-essential stores in England following month of closure because of the novel coronavirus pandemic, retail sales in June in the United Kingdom jumped back and rebounded to almost pre-coronavirus lockdown levels. This spurt also provided a lease of life to the ailing clothing stores of the country.
There was 13.9 per cent month on month jump in sales volumes in June which beat all estimates in the market.
Much of the slump in sale in recent month in the clothing and footwear segment were virtually made up with the 70 per cent month on month spike in sale in June. However thee sectors still remain among the worst hit by the pandemic as the industries reported spending as still 35 per cent lower than the pre pandemic period.
On the overall however there was a 0.6 per cent rise in sales volumes compared to the volumes in February, just before the world and the UK was hit by the pandemic. And volume sale was up by 2.4 per cent higher than the numbers in February excluding sale of fuel which has been badly hit by less commuting and other travel restrictions.
Strong sale in June was also noted in household goods stores, particularly in demand and sale of furniture and DIY products. After exceptionally strong demand, first-half underlying profit ahead of last year was forecast this week by home improvement retailer Kingfisher.
About one third of the total consumer spending the UK is accounted for by retail sales. However other figures have indicated a cautiousness among consumers about returning to spend in places such as bars and restaurants.
"The surge in retail sales volumes ... in June is not a sign that households' overall spending also is recovering fully and rapidly," said Samuel Tombs of Pantheon Macroeconomics.
 In March and April, there was a more than 25 per cent contraction in the British economy and it had only managed to partially recover in May with very limited relaxation of restrictions that were imposed across the country on March 23 in the form of Lockdown.
A rapid, V-shaped recovery has been suggested by payments data, even though a number of his colleagues doubt the continuation of this recovery, said the Bank of England's chief economist, Andy Haldane.
Spending among its members - typically large high-street chains - was 3.4% higher this June than last year, the British Retail Consortium said earlier this month.
There as a record 9.5 per cent slump in retail sales in the second quarter compared to the first, showed data released on Friday.
Compared with June 2019, sales were down 1.6 per cent.
During the lockdown period, there was a spike in online spending but which has slowed down and its proportion of the total overall spending has come down with the economy reopening and shoppers in the country were able to return to stores from June 15 onwards. However, online payment’s share of the overall spending still remained at 31.8 per cent which was much higher than the February figure of 20 per cent.