Britain suffered worst retail sales on record in 2020

13 January, 2021 12:00 AM printer

LONDON: British retailers suffered their worst annual performance on record in 2020, as the cycle of lockdowns took their toll on fashion and homeware sales.

The sector suffered an overall fall in sales of 0.3 per cent on the year, according to the British Retail Consortium-KPMG retail sales monitor, with the typically bumper Christmas period offering little respite for high street stores, report agencies.

While food sales rose 5.4 per cent in 2020 compared to 2019, non-food sales fell about 5 per cent, the trade body said. The drop in non-food sales in physical stores was even higher at 25 per cent, leaving the sector with its worst performance since the monitor started in 1995.

“Covid has led to 2020 being the worst year on record for retail sales growth. Physical non-food stores – including all of ‘non-essential’ retail – saw sales drop by a quarter compared with 2019,” said Helen Dickinson, chief executive of the BRC.

“Christmas offered little respite for these retailers, as many shops were forced to shut during the peak trading period, though this led to a rise in food-based gifts as many shoppers bought what they could from the shops that were still open.”

With shops in Britain now closed for the foreseeable future, costing them billions in more lost sales, many retailers are struggling to survive.

England’s third lockdown comes after physical shops had already endured months of closing and opening their premises in line with government regulations to curb the spread of Covid-19.

The end of the year eased the situation for some retailers, with sales over a five-week period from late November to early January 1.8 per cent higher than a year earlier. Non-food sales jumped 44.8 per cent in December, as a higher proportion of shoppers headed online. Over 2020 as a whole, online retail increased by more than a third to account for 46.1 per cent of all sales.

Susan Barratt, chief executive of grocery research company IGD, said December experienced the highest ever festive spending in the UK food and grocery retail sector and was largely in line with the elevated trend through the year.

“Though last-minute changes put the brakes on larger family gatherings, shoppers nevertheless sought to make up for their disappointments by trading up to treat themselves and their immediate households with premium and luxury lines,” she said.

However, the retail figures indicate that the online shopping surge and re-opening of physical shops after the November lockdown did not boost sales enough to offset tighter restrictions that came into force across large swathes of the country in the middle of last month.

Marks & Spencer said earlier this month that a sharp drop in clothing and homeware sales in its Christmas quarter as Covid-19 restrictions hit demand.

The retail chain said UK revenue for its third fiscal quarter was 8.2 per cent lower than last year at £2.52 billion ($3.42bn), blaming “on-off restrictions and distortions in demand patterns” caused by the pandemic.

Paul Martin, head of retail at KPMG, said December, the most important month for the retail industry, experienced some growth due to the ongoing shift of expenditure from other categories such as travel and leisure.