Retail sales continue to rebound in June

Retail sales in the UK continued their recovery in June, as the reopening of the stores released pent-up demand.

The amount of goods sold last month increased by 13.9%, said the Office for National Statistics (ONS).

Online sales continued “getting stronger,” the ONS said, accounting for £ 3 out of every £ 10 spent by consumers.

Demand in food stores remained strong, reaching new highs during the pandemic period.

Compared to February, food sales volumes were 5.3% higher, while non-store retail grew by 53.6%.

The increase followed record falls in April and a partial recovery in May, as the coronavirus pandemic caused widespread store closings and spending.

The ONS said the rebound brought overall retail sales to a level similar to what they had before closing, but added that there was a “mixed picture” at different types of stores.

In June, non-food stores, including department stores and clothing stores, partially recovered from sharp falls during the shutdown, but were still 15% lower than in February.

Non-essential stores were not allowed to reopen in England until June 15, so they were only traded for half the month.

Jonathan Athow, an ONS deputy national statistician, told the BBC that there have been “some really big changes under the surface” of the retail landscape since the shutdown began.

“Food stores continue to function quite well as we are eating more at home,” he said.

“But the real growth has been in online sales. Online sales continue to increase more and more. We’ve had record online sales: £ 3 out of £ 10 in retail sales is now spent online and that’s a big increase”.

• New rules for covering the face take effect in England
• “They said I would be cleaning bathrooms, so I quit.”

Athow said that some sectors were “fighting.”

“Some of that is due to the restrictions, which were only relaxed in mid-June in England. Clothing was reduced by about a third.

“And if we look at High Street more generally, sales on High Street, or in physical stores, also decreased by about a third.”

The proportion of online spending dropped to 31.8% in June compared to the record 33.3% reported in May, but it was a sizable increase from the 20% reported in February, the ONS said.

The ONS added that fuel sales remained at low levels, despite some recovery in May and June with the ease of travel restrictions.

One businesswoman who has taken advantage of online shopping is Hellen Stirling-Baker of Small Stuff, a Sheffield-based independent retailer.

She sells sustainably made toys, gifts, and household items for young children.

“Running my online store is how I was able to survive,” he said.

“Offering face-to-face video calls for customers to recreate the in-store experience has been crucial and sales are increasing.

“I’ve also added new services, like local hand delivery, that really increase engagement.”

‘Hope on the horizon’

Jeremy Thomson-Cook, chief economist at Equals Money, said the retail sector had seen a “V-shaped recovery,” echoing comments from the Bank of England’s chief economist, Andy Haldane.

“The British consumer motto has long been ‘When the going gets tough, the tough go shopping’ and June seems to encapsulate very well,” he added.

“In June, there were a number of driving forces at play that saw sales rise: demand built up after a relief from closing conditions, lack of alternatives, good weather, and the licensing scheme that still works at full blast .

“The four driving forces are likely to decline in the coming months, and then we will see how strong the demand is.”

Silvia Rindone, EY’s retail partner, said the latest figures showed there was “some hope on the horizon,” and that consumers began to show “cautious optimism.”

But he added: “We have not yet passed the pandemic and returning to ‘normal’ will still take time.

“With facial liners now mandatory in England stores, physical retailers must continue to focus on reassuring customers, making them feel safe and secure by maintaining a greater focus on hygiene and sanitation.”