UK Retail Sales Improve In May, But Retailers Continue To Struggle
Jun 10, 2020
This is the piece of news from KPMG,which is about the retail business in UK;
The BRC-KPMG Retail Sales Monitor for May has been published today, covering the four weeks 3 - 30 May 2020.
On a Total basis, sales decreased by 5.9% in May, against a decrease of 1.9% in May 2019*. This is the second worst decline recorded since our monitor began in January 1995, an improvement over April. It is above the 3-month average decline of 9.4% and below the 12m average decline of 2.6%.
- In May, UK retail sales increased 7.9% on a Like-for-like basis from May 2019, when they had decreased 2.2% from the preceding year*. In May, Like-for-like has been measured EXCLUDING temporarily closed stores but including Online sales: the figure is primarily driven by Online sales.
- Over the three months to May, In-Store sales of Non-Food items declined 50.3% on a Total and 21.9% on a Like-for-like basis. This is worse than the 12-month Total average decline of 14.8%. For May, the like-for-like excluding temporarily closed stores remained in double digit decline.
- Over the three months to May, Food sales increased 8.7% on a Like-for-like basis and 5.6% on a Total basis. This is higher than the 12-month Total average growth of 2.1%. For the month of May, Food was in growth year-on-year.
- Over the three-months to May, Non-Food retail sales decreased by 2.1% on a like-for-like basis and 21.8% on a Total basis. This is below the 12-month Total average decline of 6.4%. For the month of May, Non-Food was in decline year-on-year.
- Online Non-Food sales increased by 60.2% in May, against a growth of 4.4% in May 2019*. This is above the 12-month average growth of 12.9%.
- Non-Food Online penetration rate increased from 31.4% in May 2019 to 61.9% this May.
* Note 2020 is a 53-week year in the ONS calendar: as a result of the extra week in January 2020, the comparable 2019 performances cited here may differ from those published last year, due to the one-week shift in the comparison.
Paul Martin, UK Head of Retail | KPMG
"May presented yet another testing month for retailers, with total sales down by 5.9%. The decline is less drastic when compared to April’s fall of 19.1%, however we are comparing performance to the record low of May 2019.
“The disparity between different types of retailers and categories continues, with clear divides between essential and online versus non-essential and physical. Sales of computing equipment, toys and other household goods remained strong – especially online – with home-working and entertainment firmly at the forefront of consumers’ minds. Food and drink also performed well; no doubt encouraged by warmer weather and May’s bank holidays. By contrast, many non-essential categories – especially fashion – continued to attract limited demand which will increase the pressure on them in the coming months."
“As restrictions ease, retailers have much to consider during the pandemic’s recovery-phase. Stores may soon have the greenlight to re-open but it will be a gradual affair with safety front of mind, and some doors may not reopen at all. COVID-19 has acted as an accelerant in the shift towards having less of a physical presence, not least due to the obvious need to radically reduce costs for survival. We’re also witnessing historically high levels of sales transacted online – currently over 60% – and while this will ease as more stores open, consumers have formed new habits that will see the online channel continue to be more prominent going forward.”
Helen Dickinson OBE, Chief Executive | British Retail Consortium
"Sales in May demonstrated yet another month of struggle for retailers across the country, despite an improvement on the previous month. Nonetheless, as the sun came out and restaurants lay dormant, food sales rose with consumers taking to their local parks for beers, BBQs and picnics. Clothing and beauty sales improved slightly on April, as people left their homes to meet outside with friends and family. Continuing the lockdown trend, office supplies, fitness equipment and bicycles all performed well, thanks to strong online sales and DIY was boosted by the opening of garden centres. However, for those shops whose doors remain shuttered it was once again a tough month and even those who stayed open suffered reduced footfall and huge costs implementing social distancing measures.
"While the month showed record growth in online sales, many retailers will be anxious to see whether demand returns to our high streets when non-essential shops reopen from 15th June. Weak consumer confidence and social distancing rules are likely to hold back sales. Furthermore, there are concerns that if Government support is withdrawn too quickly, shops and businesses will not survive. Until the situation improves, retailers urgently need support on rents and negotiations with their landlords as high fees could force some physical retailers to shut for good.”
Food & Drink sector performance | Susan Barratt, CEO | IGD
“May marks another month of growth for the grocery retailers, with each week’s sales showing significant year-on-year gains, albeit against the backdrop of an increased cost base as a direct consequence of COVID-19. UK grocery retailers substantially benefitted from the two bank holidays and the sunniest month on record. This, combined with the start of lockdown easing, has seen more people keen to mark these occasions with BBQs and picnics.
"The latest reading of the IGD Shopper Confidence Index indicates that shopper confidence remains historically low, but there are significant shifts by region, reflecting how coronavirus is impacting different parts of the country. Tracking how the pandemic affects different shopper groups will be key to help retailers plan for the future.”
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