UK retail sales bounce back to levels seen pre-pandemic
● Food and online retailers fuel 3.6% rise during July ● But non-food businesses fail to return to normal
Shoppers returned to the high street in increasing numbers last month but business at clothes and household goods stores remains below pre-pandemic levels, according to the latest figures.
The Office for National Statistics said total retail sales volumes in July rose 3.6 per cent compared with June and are now 3 per cent above pre-pandemic levels.
But it said there is a distinct split emerging between food and online retailers, which have surpassed February’s sales figures, and non-food businesses, which have not.
Deputy national statistician for economic statistics Jonathan Athow said: “Retail sales have now regained all the ground lost during the height of the coronavirus restrictions as more stores open for trade and online sales remain at historically high levels.
“While still below their prepandemic levels, both fuel and clothing sales continued to recover.
“Meanwhile, food sales fell back from their recent peaks as people started to venture back into pubs and restaurants.”
In July, the volume of food store sales fell 3.1 per cent compared with June. Online sales also fell from June highs – back 2.1 per cent – although both measures remain above pre-pandemic levels. Howard Archer, chief economic advisor to the EY Item Club, described the overall increase in sales as “decent”.
He added: “However, the opening up of the hospitality sector and other consumer service sectors may have diverted some consumer spending away from retail sales towards services.”
Archer said consumer spending “looks on course for a substantial rebound” in the third quarter.
”The full opening up of the retail sector is unleashing pent-up demand, while the opening up of the hospitality sector and other consumer services from early July is further fuelling consumer spending. Spending on meals also appears to be getting a significant lift in August from the Chancellor’s ‘Eat Out to Help Out’ scheme.
“However, there is considerable uncertainty as to just how willing and able consumers will be to spend beyond the third quarter. Indeed, persistent consumer caution is seen as a significant risk that could limit the UK recovery.”
The pandemic has led to more than 40,000 job losses already announced in the retail sector as business leaders said the industry is going through a structural change.
As of July, clothing sales were 25.7 per cent lower than February - shedding light on Marks & Spencer’s decision to axe around 7,000 jobs, primarily in its non-food division, earlier this week.
The retail industry contributes around 5.4 per cent to GDP and is one of the biggest private sector employers.