Lockdown boosts October loungewear sales
Retail sales in October were boosted by a pre-lockdown splurge in England, but the British Retail Consortium (BRC) and KPMG have warned that the industry is “teetering on a cliff edge”.
In the four weeks to 31 October, total sales were up 4.9% year on year, the BRC-KPMG Retail Sales Monitor shows. It is in-line with the three-month average growth of 4.9% and above the 12-month decline of 0.7%.
Helen Dickinson, chief executive of the BRC, said: “October saw another month of strong sales growth, with food, gifts and loungewear high on peoples’ shopping lists. Tightening restrictions across the UK and speculation towards the end of the month of an England-wide lockdown prompted customers to stock up on home comforts and food supplies.”
Retail sales increased by 5.2% on a like-for-like basis (excluding temporary store closures) in October.
Online sales of non-food items rocketed by 39% – in line with the three-month average growth of 39.2% and above the 12-month average of 28.9%.
However, over the three months to October, in-store sales of non-food items declined by 9% on a like-for-like and 11.4% on a total basis. This was an improvement on the 12-month average decline of 19.6%. In the same period, non-food retail sales increased by 5.7% on a like-for-like basis and 4% on a total basis.
“The disparity between online and in-store non-food sales widened, with the highest online penetration rate since June,” said Dickinson. “Non-food stores once again experienced double-digit decline due to low footfall as more office workers returned to home working.
“During an incredibly challenging year for the industry, many retailers had finally thought that they were finding their footing. The new lockdown in England will now throw away this progress as we enter the crucial Christmas trading period and we estimate that £2bn of sales per week will be lost this month. It is therefore vital that retailers are able to trade [in England] from 3 December and we are asking government to urgently provide clarity about the criteria for reopening and to ensure that affected businesses are supported in the coming months.”
Don Williams, retail partner at KPMG, added: “The gap between winners and losers is stark with home-related items, like furniture and technology putting in a strong performance, while the improvement in fashion sales was short lived.
“The important ‘golden quarter’ is likely to be unrecognisable this year, with some retailers losing a month’s worth of trading opportunity. Capacity is also likely to be a significant challenge over the coming months as there is a limit to online delivery availability and social distancing has reduced the numbers of customers that can safely shop in-store at any one time. In order to survive, retailers must give serious thought to how consumers will engage in the run-up to Christmas.
“Some retailers will thrive in the new environment, others will find it bleak. The locked-in step-up in online activity will undoubtedly lead to further investments in digital capability and partnerships. Digital strategies have never been more vital, but those strategies must be cost-efficient too.”
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