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Retail sales fell at worst rate on record in March- report

Updated: Apr 18, 2023

UK retail sales declined at the worst rate on record in March as lockdown measures were introduced, according to the latest data from the British Retail Consortium.

Retail sales fell at worst rate on record in March- report

Total sales were down by 4.3% year-on-year – showing the sharpest decline since records started in January 1995 when excluding distortions – the BRC-KPMG retail sales monitor said. It also warned that worse figures could still emerge.

An “unprecedented surge” in demand for food and essentials earlier in the month was followed by a steep drop-off in sales as high streets became deserted.

And while fashion sales plunged, demand for computers, games and fitness equipment increased as families adjusted to life at home. Sales of computers and accessories, board games, and fitness equipment all rose sharply as a result of the move to home-schooling and work-from-home. In contrast, demand for the latest fashion ranges significantly declined.

In the first three weeks of March, total retail sales grew by 12%. But during the two weeks after lockdown, they fell by 27%. On a like-for-like basis, retail sales in March decreased by 3.5% compared with March 2019.

Over the three months to March, in-store sales of non-food items declined by 13%, which the report said was the result of the closure of “non-essential” stores.

During the same three-month period, food sales increased more strongly than the longer-term average.

Online non-food sales also increased more strongly in March than the longer-term average, as people spent more time at home. Helen Dickinson, chief executive of the BRC, said: “In March, the necessary measures to fight the spread of coronavirus led to the worst decline in retail sales on record.

“Furthermore, the headline figure masked even more dramatic swings: food and essentials faced an unprecedented surge in demand in the early part of March, only to drop significantly into negative growth after the lockdown and introduction of social distancing in stores. “The closure of non-essential shops led to deserted high streets and high double-digit declines in sales which even a rise in online shopping could not compensate for. Sales of computers and accessories, board games, and fitness equipment all rose sharply as a result of the move to home-schooling and work-from-home. In contrast, demand for the latest fashion ranges significantly declined.”

She said the retail industry is at the epicentre of the crisis “and the tremors will be felt for a long while yet” – with millions of livelihoods depending on Government support.

Dickinson said: “Many physical non-food retailers have been forced to shut down entirely or to limit themselves to online-only to protect customers and staff.

“Consequently, hundreds of thousands of jobs at are risk within these companies and their supply chains. At the same time, supermarkets brace themselves for lower sales, while still spending huge sums on protective measures, donating to food banks and hiring tens of thousands of temporary staff. We welcome the Government’s actions to date, yet millions of livelihoods rely on their continued support.” Paul Martin, UK head of retail at KPMG, said: “Retail sales experienced a historic drop in March, with Covid-19 changing the consumer landscape significantly.

“Lockdown has prompted a fundamental rethink of what is deemed essential. Total sales may ‘only’ be down 4.3%, but the sharp divide between food and non-food, and between physical and online, is far more drastic. Also, the UK’s closure of non-essential stores only started at the backend of the month, so it’s likely worse data is yet to emerge.

“Staying home has seen a surge in sales of food and drink; computing equipment, toys to keep children entertained, and unsurprisingly health-related goods too. Yet our high streets are completely void of footfall, and non-food categories like fashion have been forced into hibernation.”

He added: “Non-essential retailers have had to immediately address cash preservation and liquidity, furlough parts of their workforce and understand how to access various Government support schemes. Meanwhile, essential retailers have focused on stabilising their supply chain and product availability, whilst focusing on the safety and welfare of their employees and customers.

“An uncertain future lies ahead and the industry’s reset button has clearly been pressed.”

“Online shopping never been so important”

Hugh Fletcher, Global Head of Consultancy and Innovation, Wunderman Thompson Commerce argued that online shopping has never been so important, with the short- and long-term survival of retailers dependent on how they can cope with increasing demand on their online channels.

“The last month was always going to be difficult for retailers, and with consumers holed up in their homes, the balance between physical and online retailing was disrupted almost overnight,” Flethcher said. “Ecommerce has all of a sudden become the only option for many brands and retailers, meaning those businesses that were already prepared for a massive uptick in demand for online purchases were and will be best equipped to ride this rocky wave. Those that were not face the dual challenge of finding a solution for short-term survival, when struggling to find the budget and resource for longer-term digital transformation. For example, Amazon – the best example of a digitally native retailer – has reported that consumers are purchasing $11,000 worth of goods per second, highlighting its ability to cope with high demand and increased traffic in the most unprecedented of circumstances. Its eCommerce capability is supported by its physical infrastructure capabilities too, meaning that it can sell and deliver during this period of lockdown.

“As retailers attempt to weather the storm caused by COVID-19, they are presented with many challenges. Even for supermarkets, the increase in online shopping – which has been made a necessity to many parts of the population – has tested the boundaries of those who are at the top of the eCommerce tree. Yet never has online shopping been so important. Moreover, it is essential as consumers continue to follow social distancing with our research indicating that 62% of UK customers intended to increase their usage of digital shopping channels regardless. Retailers that are able to put measures in place to cope with the spike in demand will find short- and long-term survival much easier. And let’s be clear, this change in the retail landscape, which has super-charged the digital takeup of almost every generation, may very well result in a lasting change to retail in the long-term”


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