UK retail sales drop

20 June, 2021 12:00 AM printer

UK retail sales drop

LONDON: British retail sales fell last month on easing lockdown curbs, as people dined at bars and restaurants instead of buying food at supermarkets, data showed Friday.

Sales by volume declined 1.4 percent in May after a 9.2-percent bounce in April, the Office for National Statistics said, reports AFP.

Food stores were the hardest hit, with sales sinking 5.7 percent as Britons took advantage of reopening hospitality.

Under the phased reopening of Britain’s battered economy, bars and restaurants restarted outdoor dining in April and indoor services in May.

“Instead of eating every meal at home as we all did during lockdowns, we were able to dine outside at cafes or restaurants,” said Capital Economics analyst Paul Dales.

“Spending just shifted from the shops to social activities,” he said, but warned however that “soft retail sales data could mean May was not as strong for the economy as we had thought”.

Overall UK retail sales in April and May were nevertheless 9.1 percent higher than the pre-pandemic level in February 2020.

The UK also reopened non-essential retail in April, allowing the broader British economy to recover further from pandemic fallout on the rapid vaccines rollout.

The economy is now expected to fully reopen on July 19, after the government this week delayed the date by four weeks due to surging Delta infections.

Britain’s business lobby predicted Friday that the economy is on course to reach its pre-Covid level by the end of 2021.

The Confederation of British Industry, the nation’s biggest employers’ organisation, now expects the economy to surge 8.2 percent this year and 6.1 percent in 2022.

The Covid-ravaged economy had collapsed by almost ten percent last year in Britain’s biggest slump in three centuries—and the worst performance among the G7.

Stubborn Brexit worries also fester after Britain formally exited the EU single market at the start of 2021.

Industry data showed Friday that UK food and drink exports to the bloc almost halved in the first quarter as a result of both Brexit and pandemic fallout.

The Food and Drink Federation (FDF) said EU sales slumped 47 percent from the same period a year earlier.

Exports to the EU fell by £2.0 billion ($2.8 billion, 2.3 billion euros) compared with the first quarter of 2019, before the pandemic struck.

The industry body blamed “the ongoing impacts of Covid-19 and changes in the UK’s trading relationships” after Brexit.

Non-EU sales accounted for 55 percent of all UK food and drink exports in the first quarter, it added.

“The loss of £2 billion of exports to the EU is a disaster for our industry,” said Dominic Goudie, head of international trade at the federation.