UK retail sales go into reverse for first time in six months

UK retail sales went into reverse in November for the first time in six months, as lockdown restrictions forced the closure of many stores.

Sales dropped 3.8% between October and November, according to the latest Office for National Statistics (ONS) data published on Friday.

Howard Archer, chief economic advisor to the EY Item Club, said the decline was “relatively modest” given the heavy curbs in place, and showed a “resilient” picture for much of the sector.

Strict coronavirus restrictions were in place for much of the UK in parts of November, including an enforced shutdown of ‘non-essential’ retail in England for most of the month.

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Michael Hewson, chief market analyst at CMC Markets UK, noted ahead of the figures that lockdowns had been expected to bring sales to a “shuddering halt.” Analysts had predicted a decline of 4% or more month-on-month, so the fall was less severe than feared.

Sales were still above pre-pandemic levels despite the monthly decline, and online sales made up a greater share than the previous month at 31.4% of total retail.

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Hewson noted separate industry figures had been “surprisingly not as bad as feared” in November, showing sales accelerating in the run-up to Christmas. British Retail Consortium (BRC) data showed a 7.7% rise in sales, with booming online sales helping firms.

“Sales of electronic items also rose with the rollout of the new Xbox and PlayStation 5,” said Hewson.

Analysts have also noted how many small retailers are likely to have improved their online operations since the first nationwide lockdown, while click-and-collect services were allowed during England’s tighter restrictions.

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The ONS figures conceal stark contrasts between the fate of different parts of retail, however. While household goods, food products and overall online sales are significantly above February levels, clothing sales are still down 30.5%.

Clothing retailers reported the sharpest decline in sales volumes of any sector in November as curbs on both shopping and socialising hit hard, with a monthly fall of 19%. Fuel sales also slid 16.6% as lockdown curbed travel.

By contrast food and household goods sales increased overall during November.

A “shift in consumer habits” saw shoppers increasingly use click-and-collect for food orders with restaurants, bars and cafes closed or restricted to takeaways, as well as buying products early for Christmas and embracing DIY ahead of the festive season.

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