UK retail shows best quarter on record (brc.org.uk)
Susannah Streeter, senior investment and markets analyst, Hargeaves Lansdown:
‘’The UK retail sector hasn’t just got a spring in its step, but a post-lockdown swagger. Like-for-like retail sales increased 17% in June, compared to the same month in 2019, according to the BRC-KPMG Retail Sales Monitor. Taken over the three months from April to June, the bounce back in sales witnessed made it the best three month period for growth on record according to the British Retail Consortium.
After months of languishing in loungewear, shoppers sought new styles in April and May, eyeing the chance to socialise once more. June kicked off a Euro tournament splurge, with TVs, snacks and beer sales booming. But the BRC/KPMG figures also highlight a trend noted in the ONS statistics for May. There is a fight brewing for the ‘share of the wallet’ with the opening of hospitality seeing a tailing off in retail consumer spending. This was particularly marked in retail food sales volumes which fell 5.7% in May, when diners were finally allowed to eat inside restaurants once more.
So after shoppers shot out of the traps in April, the sprint has slowed to more of a jog into the summer months. However, the novelty of spending in physical rather than virtual stores hasn’t yet worn off, with online sales falling back by 7% compared to June 2020. But even so the proportion of retail sales conducted online remains substantially higher than before the pandemic, more evidence that the crisis has brought about a dramatic change to where we want to shop.
Other economic data released by the ONS in July showed although people have returned to stores, many are still shunning high streets and shopping centres and nipping to retail parks instead for a quick retail fix.
In the week up to 3rd July overall footfall was 72% of the equivalent week in 2019, but high street footfall came in at 65% of 2019 levels and shopping centre footfall was even lower, at 67% of pre-pandemic rates. In contrast footfall in retail parks was much higher, reaching 91% of its level in the equivalent week of 2019. This trend has been reflected in an operational update from British Land today, indicating that the outlook is much brighter for its retail park portfolio which is nudging the value of those asset values up
It seems many shoppers have become used to the ease of parking and the extra space offered, choosing vast warehouse style stores in retail parks, to the smaller boutiques on the high street. It’s still unclear if this will be a long term trend or just temporary until shoppers receive the confidence boost of double vaccinations before they cram into smaller shops once more.
High street football may also rise once global travel resumes and the lucrative international shopper returns, but for now city centres still remain much quieter compared to before the pandemic, which means filling empty shops is still a significant challenge.’’
About Hargreaves Lansdown:
Over 1.6 million clients trust us with £132.9 billion (as at 30 April 2021), making us the UK’s largest digital wealth management service. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.
Our purpose is to empower people to save and invest with confidence and help them build their financial resilience over the long-term. We provide a lifelong, secure home for people’s savings and investments that offers great value and an incredible service making their financial life easy.
Clients rate our service highly, 90% say we are good, very good or excellent. Our expert research has been helping investors for almost 40 years through thick and thin.
In 2018, we also launched Active Savings, an online cash savings platform that lets savers move money easily between partner banks and building societies to help their money work harder without the hassle. Find out more about HL and our history, what it’s like to work with us, and how we support our community, including our response to the COVID-19 pandemic
