October sales volumes at clothing stores were down 13.8% on February

October sales volumes at clothing stores were down 13.8% on February

UK retailers enjoyed a sixth consecutive month of sales growth in October – but clothing was one of only two sectors with sales volumes still down on their pre-pandemic levels.

The latest data released today (20 November) by the Office for National Statistics (ONS) shows UK retail sales volumes in October were 1.2% higher than September, and are now 6.7% above February's pre-lockdown levels.

Most sectors recovered to a higher level than February with feedback showing consumers appeared to be shopping earlier for Christmas this year, which has helped boost sales. Clothing stores and fuel were the only sectors still below their pre-lockdown sales.

Total retail sales values (excluding fuel) increased by 7.9% in October when compared with February, driven by a 52.8% increase in online sales in comparison with a 3.3% decline in store sales

Clothing stores, with an overall decline of 14% in value sales when compared with February's pre-pandemic level, increased their online sales by 17.1% but saw the biggest fall in store sales, which dropped 22.1%.

Sales volumes at clothing stores were down by 1.1% in October from the month before, and 13.8% below February's level. 

Clothing store sales were the worst hit during the pandemic, with government restrictions meaning non-essential stores – including most of those selling clothing and footwear – were closed from mid-March, and only started trading again in June.

A survey examining the business impact of Covid-19 carried out by the ONS showed the largest percentage of stores reporting a decrease in footfall due to the pandemic were those selling textiles, clothing and footwear. 78.9% of businesses in the sector said footfall in the last two weeks was down in comparison to normal expectations for this time of year.

A well-oiled supply chain will be 'make or break'

The overall numbers "report punchy growth and provide strong evidence of shoppers starting their Christmas shopping earlier this year," notes Richard Lim, CEO of Retail Economics. "Faced with uncertainty around further restrictions and fears about availability, spending has been shifted forward, which will come at the expense of sales later in the year. 

"Online was again the clear winner as shoppers clicked from the comfort of their own homes rather than mixing in physical locations. For many households, cancelled holidays, less commuting and fewer nights out have boosted spending power and we're seeing this filtering through to parts of the sector. 

"The second lockdown couldn't have come at a worse time for the sector. Many retailers have been hanging on by a thread, waiting to trade through Christmas to strengthen balance sheets and position themselves the best they can heading into 2021. Those that don't have sophisticated online propositions and the capacity to cope with the shift towards online will be under enormous pressure." 

Ian Geddes, head of retail at Deloitte, concurs that early Christmas shopping has helped maintain robust retail sales in October, with Black Friday sales also beginning earlier than ever this year as retailers look to ease already pressured supply chains and spread the one-day promotional period over two weeks.

"With many non-essential shops remaining closed for Black Friday, the annual sales event will likely look and feel very different this year, with consumers making fewer impulse buys and more deliberate purchases. As the party season goes online, clothing purchases – where some of the greatest Black Friday discounts have traditionally been found – will likely be driven by comfort wear rather than party attire. In the advent of virtual gatherings, 'waist-up wear', such as novelty pieces and make-up, are also likely to prove popular.   

"In a challenging year for many retailers, the success of Black Friday, and level of continued discounting in the run-up to Christmas, remains to be seen. More certain this golden quarter, however, is that the consumer is holding all the cards."   

Lynda Petherick, head of retail for Accenture UK and Ireland, adds that extended Black Friday deals and early Christmas shopping have provided a welcome boost to retailers – but notes England's nationwide lockdown will likely prompt steeper falls in November.

"Brands must continue their fight to salvage as much as they can from the golden quarter, and it's clear e-commerce will be a crucial component for success whilst retailers grapple with a surge in online deliveries. With Black Friday and Christmas just around the corner and all non-essential retail in England shut for November, we're seeing a new wave of consumers switching their shopping online, which for many retailers will test the strength of their e-commerce and delivery capabilities.

"A well-oiled supply chain will be 'make or break' for retailers over this festive period. The next two months will show us which retailers took learnings on board during the first lockdown and which have struggled to prepare their delivery networks to meet new consumer demands. For the latter, there could be very little cheer this festive period."

Meanwhile Lee Lucas, principal and CEO of the Fashion Retail Academy, says it's positive news for retailers to see consumer spending increasing in the run-up to Christmas.  "We can expect to see an uplift in online sales throughout November, as retailers will be relying on their websites to capture early Christmas shoppers. 

"Thankfully, retailers are in a much stronger position than they were in the last lockdown, and have worked hard to improve their online presence. They've had time to perfect social distancing measures in warehouses to enable them to quickly get deliveries to their customers and they are not dogged by as many unknowns as they were in March and April.

"Hopefully retailers will be able to reopen at the beginning of December as planned since the timing still gives consumers enough time to flock to the shops to finish their Christmas shopping. A successful December would mean stores end a very difficult year on a high."