Shoppers fuel sales growth in October but BRC warns that lockdown easing by December “is vital for survival”

Shoppers taking the opportunity to stock up on home comforts and food supplies ahead of the England-wide lockdown helped total retail sales increase 4.9 per cent in the four weeks to October 31, indicating some respite for the UK retailer hampered by coronavirus restrictions this year.

Despite the lift – one that measures in immediate contrast to the 0.3 per cent decline in the same period the year prior – KPMG has warned that the “gap between winners and losers” this year will be ‘stark’. It has said that while online sales remain high and are set to grow further during Black Friday and lockdown, not all retailers are in a position to adapt.

According to the British Retail Consortium-KPMG Retail Sales Monitor, UK retail sales, excluding temporarily closed stores and including online sales, increased 5.2 per cent on a like for like basis. Non-food items fell nine per cent and 11.4 per cent in like for like and total terms respectively – but this is an improvement from the 12-month average decline of 19.6 per cent.

while Helen Dickinson, BRC chief executive has hailed October 2020 as a month of strong sales growth for the UK, it has come with a caveat.

“Tightening restrictions across the United Kingdom and speculation towards the end of the month of an England-wide lockdown prompted customers to stock up on home comforts and food supplies,” she said. “During an incredibly challenging year for the industry, many retailers had finally thought that they were finding their footing.

“The new lockdown in England will now throw away this progress as we enter the crucial Christmas trading period, and we estimate that £2 billion of sales per week will be lost this month.

“It is therefore vital that retailers are able to trade from December 3 and we are asking government to urgently provide clarity about the criteria for reopening and to ensure that affected businesses are supported in the coming months.”

KPMG retail partner Don Williams, added: “The gap between winners and losers is stark with home-related items, like furniture and technology, putting in a strong performance while the improvement in fashion sales was short-lived. Online sales remain high and are set to grow further during Black Friday and lockdown.

“Not all retailers are in a position to take advantage of this shift in customer behaviour, which has been accelerated by circumstance and for many is now both choice and habit.

“The important Golden Quarter is likely to be unrecognisable this year, with some retailers losing a month’s worth of trading opportunity.

“Capacity is also likely to be a significant challenge over the coming months as there is a limit to online delivery availability and social distancing has reduced the numbers of customers that can safely shop in store at any one time.

“Some retailers will thrive in the new environment; others will find it bleak. The locked-in step-up in online activity will undoubtedly lead to further investments in digital capability and partnerships.

“Digital strategies have never been more vital, but those strategies must be cost-efficient, too.”

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