With the stay at home advisory in place, the UK retail market recorded historic fall in sales in March. The liquor is the only exception. As the deepest economic depression knocking the door, the fall in retail sales of 5.1%, compared with the previous month exceeded the already downbeat expectations of City analysts, who forecast a 4% slide for March.
A deeper slump was prevented due to the panic-buying of food and freezers before the lockdown. The majority of these orders were placed through e-commerce. Leaders predict a fall of up to 30% in April when the full impact of the government’s restriction will be felt.
According to a report, the Office for National Statistics said store closures had hit sales of furniture and home furnishings and especially clothing, which dived by 35% month on month. Petrol sales declined by 19% month on month. The latest blow to high street sales came after a torrid 12 months in which many chains have gone to the wall and others shut stores in towns across the country.
The picture was not quite rosy even before for retailers. The industry was bleeding under competition, rising business rates and escalating rents. Even the luxury and big-ticket items such as cars were no exception with consumers' confidence in the economy hit hard in Brexit uncertainty.
Rishi Sunak, the chancellor, last months announced a slew of measures to protect businesses from the worst of the Covid-19 fallout, including a business rates holiday. Now, the government banned commercial landlords from “aggressive rent collection”. This should help many retailers that have fallen behind with payments over recent months.
But the profit decline for the high street cannot be contained by the declared measures., even after the lockdown is ended. Buyers, for safety measures, might continue to prefer online shopping rather than walking into a shop. Revealing a strong divergence in sales, food, household goods and other non-food items all increased sales by value on the month by 15.3%, 18% and 16.4%, respectively, the ONS said.
Supermarkets reported a sharp increase in volume sales, at 10.3%, while off-license sales of alcohol soared 31.4% in volume terms. Online sales jumped to more than 22% of all sales, compared with an average of 18% over the last year. Department store sales rose by 2.8% month on month, though the increase appeared to be due to purchases of food and other items online.
The ONS said: “Comments from food store retailers suggested that panic-buying, or stockpiling during the coronavirus pandemic, was a big factor in the increased sales, particularly for supermarkets.”The ONS also confirmed that April was likely to bring even more significant falls. It said retailers responded to its survey between 1 March and 4 April 2020, meaning that two weeks of the five-week trading period were under physical distancing measures introduced before the lockdown.
“Those trading in essential goods, particularly food, have seen sales increase by 3.9%, month-on-month, while the non-food category has seen the greatest decline as lockdown measures pressed an indefinite pause on the UK high street.”
