Official data released today (20 May) by the Office for National Statistics (ONS) shows non-store retailing sales volumes, which are predominantly sales from online-only retailers, rose by 3.7% in April, led by stronger clothing sales. Sales volumes were 26.7% above their pre-coronavirus level.
Non-food stores as a whole saw monthly sales volumes fall by 0.6% in April but were 2.4% above their pre-coronavirus level.
Department stores and clothing stores both reported a monthly increase of 1.3% in sales volumes. Feedback from some retailers suggested that the pick-up in clothing was because of customers booking events such as weddings and holidays.
Online spending values, meanwhile, were up by 6.2% when compared with the month prior, due to a strong increase in non-store retailing (11.3%) and clothing stores (3.6%).
The proportion of online sales rose to 27% from 25.9% in March. Despite the increase in April, the proportion of online sales has broadly fallen since its peak in February 2021 (37.6%) but is substantially above its level of 19.9% in February 2020 before the pandemic.
Increased UK demand for clothing
Jacqui Baker, partner and head of retail at RSM UK, notes despite the cost of living crisis and lockdowns in China causing further supply chain disruption, resilient retailers saw a bounce-back of 1.4% in retail sales last month.
“Easter holidays combined with improved weather boosted food sales by 2.8%, whilst holidays, more weddings and festivals led to an increase in demand for clothing, with sales up 1.3% in April.
“Given such as sharp fall in March some restocking of pantries and fuel tanks could have been expected, but the outlook for rest of the year looks difficult for consumers with increased energy bills and the cost of living squeeze hitting household budgets.
“New Covid lockdowns in China also hampered further sales as stores are struggling to get stock. In such a challenging trading landscape, not being able to capitalise on pent up demand due to supply issues is unwelcome and adds another layer of complexity as it forces retailers to source their stock from elsewhere.
“As the Government closes the online sales tax consultation (today), which has divided opinion across the sector, retailers will be hoping that any future policy supports growth rather than adding further complexity and potential cost at a time when retailers look to recover post-pandemic.”
Oliver Vernon-Harcourt, head of retail at Deloitte, concurs the arrival of April’s warmer weather and the first bank holiday barbecues of the year have fired up retail sales, as both values and volumes rose by 1.9% and 1.4% respectively, driven by food sales and the first Easter free of Covid-19 restrictions.
“Strong clothing sales indicate consumer demand to refresh wardrobes, and the return of large gatherings drove higher food and alcohol sales. For those consumers that can afford it – typically those in higher-income households – spending has accelerated in areas such as leisure, eating out and holiday bookings,” he says.
“However, just because overall spending is rising doesn’t mean that this is true for everyone and higher-income households are likely to account for a disproportionate share of spending. Over half of UK consumers have already seen an increase in their overall personal expenditure since the start of the year and, with inflation hitting a 40-year high just this week, spending power could weaken further for many in the months ahead. ”
Vernon-Harcourt adds following months of slowdown, the share of online sales grew for the first time since January, rising to 27%, up from 26% in March.
“With all remaining Covid-19 restrictions now lifted, this may point to a new post-pandemic baseline for online sales.
“We will continue to see retailers seek new ways of blending the digital experience in-store this year through digital products and services.”
Meanwhile, Lynda Petherick, head of retail for Accenture in the UK and Ireland, notes after the rebound in sales, there may be cautious optimism among retailers hoping for better times ahead, during what has been a challenging year so far. However, any hope is likely to be tempered by this week’s news that UK inflation has reached its highest rate in 40 years, she says.
“Though the summer months typically bring a welcome boost in sales, all signs indicate that consumers are more likely to cut back than splash out.
“Nosediving consumer sentiment mixed with surging costs across the board – particularly in manufacturing and the logistics of deliveries and returns – is a lethal combination for the sector. As the pressure continues to mount, retailers must strike a careful balance between protecting their own margins whilst doing the right thing by their customers – who are likely to remember who helped them to weather the storm in years to come.”
Earlier this week, Just Style spoke exclusively to GlobalData apparel analyst Pippa Stephens about why women’s clothing prices are rising faster than men’s and predicts it could have an impact on clothing sales in the coming months.