UK retail sales tumbled month-on-month in both volume and value terms in January, with a national lockdown leading to declines of more than one-third in the amount spent and the quantity bought at clothing stores.
The latest data released today (19 February) by the Office for National Statistics (ONS) shows UK retail sales volumes in January decreased by 8.2% when compared with December, amid tighter nationwide coronavirus restrictions.
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However, clothing stores saw monthly declines of 35.6% in the amount spent and 34.7% in the quantity bought.
The proportion of online retail also surged to a record level of 35.2% in January, up from 29.6% in December.
Feedback from retailers suggested that the impact of the enforced closures was not as bad as in April – the first full month of restrictions on the retail sector – when total retail fell by 22.2% when compared with the pre-pandemic February level. During the current period of restrictions, improved online capability and click-and-collect purchases helped lessen the impact, with a fall of 5.5% in January 2021 compared with February 2020 levels.
During each period of tighter restrictions to non-essential retail, department stores and clothing retailers have been affected the most severely.
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By GlobalDataPrior to the pandemic, over 60% of all clothing was bought within the non-food sector, but during the first period of retail restrictions this proportion dropped to 33.2% and 32.4% in April and May 2020 respectively. Not surprisingly, both supermarkets and online retailers have seen higher sales of clothing products when high street stores have been closed.
As restrictions were lifted, the sale of clothing products quickly returned to historical patterns. However, during January 2021, more clothing products were again sold online: 44.2% compared with non-food retailing with 32.4%.
Challenging start to the year
Lynda Petherick, head of retail for Accenture UK and Ireland, notes it’s been an exceptionally challenging start to the year for retailers, with January falling victim to yet another drop in total sales volume.
“With non-essential retail stripped of all in-store footfall as the UK entered yet another national lockdown, retailers were forced to rely on e-commerce to capitalise on the typical January sales season, with online sales soaring to eat up a large proportion of total retail spend.
“Retailers will be holding their breath for the government’s roadmap out of lockdown. There is light at the end of the tunnel and businesses can now be thinking about how their long-term strategies can best exploit pent-up consumer demand while balancing exciting and safe in-store experiences. However, these plans must remain on ice for now, with the immediate focus on continuing to capitalise on the recent record sales of non-food items online, by ensuring e-commerce offerings are as seamless and engaging as possible.”
Richard Lim, CEO, Retail Economics, adds any momentum in the run-up to Christmas was deflated by the third national lockdown in January.
“Retail sales plunged at the fastest rate since the pandemic broke last year as January blues were heightened by further restrictions to control the spread of the virus.
“However, the proportion of online sales reached new heights. The pandemic has driven a step-change in online shopping and a new wave of digital shoppers have broken down the initial barriers of setting up online accounts, entering payment details, and overcoming issues of trust. Consumers now seamlessly transition to lockdown shopping habits, switching to online channels they discovered during previous lockdowns. It’s inevitable that some of these behaviours will become a permanent feature of the industry as consumers embrace a new way to shop and the industry boosts online capacity.”
Elliott Jacobs, EMEA commerce consulting director at LiveArea, concurs, adding the rising proportion of online spending is no surprise.
“Retailers have been forced to rely on e-commerce, with physical shops closed. While 42% of retailers were focusing on digital investment in May 2020, cash alone does not make a successful strategy. Time and again this year has proven that focusing on speed and flexibility of digital rollouts is the real determinate of longevity.
“Companies, like Asos and Boohoo, with seamless checkouts, clear returns policies, and consistent messages across all platforms have won through and consolidated the market. Given their standing start, the reality is many more household retailers will go under in the coming months – to remain relevant and afloat they need to innovate at speed, finding the e-commerce strategy that works for them.”
