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April 23, 2021

Sales rise at UK clothing retailers but still lag pre-pandemic levels

UK retail sales continued to recover in March, with clothing stores recording the strongest growth as consumers updated their wardrobes ahead of the easing of lockdown restrictions. But sales in the sector still remain 41.5% below pre-pandemic levels.

By Beth Wright

UK retail sales continued to recover in March, with clothing stores recording the strongest growth as consumers updated their wardrobes ahead of the easing of lockdown restrictions. But sales in the sector still remain 41.5% below pre-pandemic levels.

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  • What impact is inflation having on UK retail sales?
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  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
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  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
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by GD50 Custom
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The latest data released today (23 April) by the Office for National Statistics (ONS) shows UK retail sales volumes rose 5.4% month-on-month in March. Sales were 1.6% higher than February 2020 before the coronavirus pandemic took hold.

Despite the strong figures, retail sales for the quarter were subdued: in the three months to March 2021, retail sales volume fell by 5.8% when compared with the previous three months, with strong declines in both clothing stores and other non-food stores as a result of the tighter lockdown restrictions.

Clothing retailers reported the strongest growth in sales volumes in March, with sales up 17.5% on the month before. However, sales volumes remain 41.5% below the level in February 2020 before the pandemic began.

Online spending, meanwhile, was up 0.6% on February, with strong growth in textile, clothing and footwear stores of 10.9%. This was the largest monthly growth in the sector since June 2020.

The proportion of online retail decreased in March to 34.7%, down from 36.2% in February, but still remains far higher than the 23.1% reported in March 2020.

Cautious promise

Ian Geddes, head of retail at Deloitte, notes the just-released figures offer the first year-on-year comparisons since the start of the Covid-19 pandemic.

“With non-essential shops closed in March, as they were at the end of March 2020, it is hugely encouraging to see sustained momentum as total sales continued their steady growth.  

“As expected, consumers continued to shop online for new purchases in the absence of physical stores, this month accounting for 34.7% of all retail sales, slightly down from the previous month but still considerably higher than March 2020. After an exceptional year for the industry, replete with its own challenges, this is an encouraging indication of the store coming. Whether the level of online spending will be sustained over the coming months remains to be seen but, for many consumers, online shopping has become as convenient as the physical store experience.  

“With the UK recording its warmest March day in over 50 years, the arrival of spring sunshine was perfectly timed with new season collections, giving clothing and footwear sales a small boost. Eagle-eyed consumers may have even spotted the re-appearance of some 2020 collections, as retailers brought back stock impacted by the UK’s first lockdown. This is unlikely to put off consumers, however, many of whom have been buying fewer new products in an effort to adopt a more sustainable lifestyle during Covid-19 pandemic.”

Jacqui Baker, partner and head of retail at RSM, concurs, noting March retail sales show cautious promise as the roadmap out of lockdown begins to unwind.

“Retailers will be glad to see month-on-month growth as a steady upward trend continues. A positive sign, but there’s still some way to go before the market recalibrates post-lockdown and retailers can begin to reforecast as new consumer buying habits emerge.

“With kids back to school in early March and outdoor gatherings permitted, even beleaguered clothing and accessories retailers saw an uplift in sales as consumers prepared for the first stages of reopening. This will come as a relief to many retailers as this week’s ONS Consumer Price Inflation Index revealed extended discounting into March as the industry tried to offload unsold stock before the next season drops.

“Online penetration dipped marginally but remained strong in March but April is where we’ll begin to see if the split between online and bricks and mortar begins to plateau.”

Meanwhile, Lynda Petherick, head of retail for Accenture UK and Ireland, adds that after a year of near-endless lockdowns, there is now a palpable sense of excitement among retailers and shoppers alike as the nation gears up for a cautious return to normality.

“While March saw some gradual easing of social restrictions and encouraging sales growth, it will be April’s figures, which will factor in non-essential retail reopening, that retailers will be waiting for with bated breath. Naturally, retailers’ hopes are high for pent-up consumer demand being unleashed around this milestone, but the need to create both a safe and engaging in-store experience as they open their doors will be paramount.

“With online spending figures for February and March continuing to reach all-time highs, we expect demand for online to remain strong post the reopening of non-essential retail. Though retailers will be keen to capitalise on the return of shoppers to the high street, they must also strike a balance across both their physical and digital offering, or risk losing out to competitors that learned strategic lessons from the pandemic.”

Related Companies

Free Whitepaper
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What is the impact of historically high inflation on the UK consumer landscape?

The average UK consumer is experiencing a severe cost-of living crisis as inflation surges to a forty-year high and the price of goods continues to rise. This shock is the result of the sharply increasing costs of commodities, energy, and the ongoing conflict in Ukraine, and is threatening FMCG manufacturers, retailers, and foodservice operators’ ability to survive and grow. Inflation will have a profound effect on many consumer-facing industries in 2022 and beyond. Consult GlobalData’s new whitepaper, Inflation in the UK: The Impact of Historically High Inflation on the UK Consumer Landscape, to better understand shifts in consumer behavior and their impact on spending patterns, as well as the implications for UK businesses. This whitepaper covers:  
  • Why has global inflation returned with a vengeance?
  • What is the current inflation situation in the UK?
  • What impact is inflation having on UK retail sales?
  • What tactics are businesses relying on to tackle the effects of high inflation?
  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

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