Business

Retail sales collapse in April as lockdown forces shops to stay shut

Retail sales collapsed in April as the lockdown hit shops across the UK

APRIL saw record-breaking falls in retail sales as hundreds of thousands of businesses were forced to shut up shop to help tackle coronavirus.

The total volume of retail sales fell by 18.1 per cent in April compared to the previous months, the Office or National Statistics (ONS) reported. There had already been a drop of 5.2 per cent compared to February.

And it came as it emerged the UK government borrowed £62.1 billion in April, the highest monthly figure on record, and equivalent to its whole borrowing for this year.

On the retailers' woes, clothing sales were the hardest hit, falling by 50.2 per cent compared to March, a month which had itself seen drops of 34.9 per cent from February's figures.

Sales from household goods stores fell 45.4 per cent, on the back of an 8.7 per cent drop from February to March.

Supermarkets also saw a fall of 2.8 per cent, having seen sales increase 10.4 per cent in March.

The results come in the same week Chancellor Rishi Sunak warned the UK is "likely to face a severe recession, the likes of which we haven't seen".

The only sectors making hay in the current in the current climate were non-store retailing, such as online only and catalogue businesses, and off licences.

Non-store retailing saw rises of 18 per cent, while off licences saw sales increase by 2.3 per cent.

The proportion spent online rose to 30.7 per cent in April, the highest on record, up from 19.1 per cent over the same month last year.

Almost all store types reached record proportions of online spending in April, the ONS said, as many retailers shifted to online trading only.

In the wake of the figures being published, Belfast Chamber Chief Executive Simon Hamilton has called on the Executive to develop a strategy to ensure the long term sustainability of city centres and high streets here, and specifically called for the creation of Future High Street Funds for Northern Ireland similar to the one in operation in GB.

He said: “The 18 per cent drop in retail sales across the UK in April highlights the threat to city centres and high streets posed by Covid-19 and the lockdown restrictions it has brought.  Retail is a sector that has been facing challenges for some time, but the coronavirus pandemic has exacerbated the situation with a 30 per cent increase in online sales.  This all adds up to a worrying period for the retail sector who face a troubling future of these trends continue.

"City centres and high streets are, of course, about much more than retail. Shops, along with offices, hospitality and leisure businesses, generate the vibrancy we normally see in Belfast city centre and towns across the region. They are where people come together and cannot be allowed to slowly decline.

"Given the impact of theCovid-19  restrictions on our city centres and high streets, now is the time, as part of its plan for economic recovery, for the Executive to consider replicating the Government’s Future High Streets Fund. Its £1 billion fund is helping 100 cities and towns to improve transport and access into town centres, convert empty retail units into new homes and workplaces, and invest in vital infrastructure. But there is no equivalent scheme for towns and cities in Northern Ireland. If we value the economic, social and cultural role that our city centres and high streets play then this needs to change."

He added: "As the Executive turns its attention to how they help the economy to recover from the impact of Covid-19, they should carefully consider how they could create a scheme like the Future High Streets Fund that could help breathe new life back into our city centres and high streets.”

Jonathan Athow, ONS deputy national statistician for economic statistics, said: "The effects of Covid-19 have contributed to a record monthly fall in retail sales of nearly a fifth.

"Fuel and clothing sales fell significantly while spending on food also dropped after the surge from the panic buying seen last month.

"Off-licence sales, however, continued to increase.

"Online shopping has again surged as people purchased goods from their homes."

Dr Kerstin Braun, president of trade finance provider Stenn Group, predicted that the pandemic would change the retail landscape forever.

"A record number of people joined the unemployment ranks in April and some eight million are receiving 80 per cent pay through the furlough programme, which has been extended until the end of October," she said.

"This is not an environment for free-wheeling consumer spending, as demonstrated in the record 18.1 per cent decline of retail sales in April, following the 5.2 per cent fall in March."

She added: "The pandemic has hastened structural changes to the retail sector that were in motion before the pandemic, in particular the increase in online shopping which has soared to the highest on record.

"Department stores, malls, and fast fashion were already in decline, giving way to online shopping and the less-is-more attitude of millennial shoppers."

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