Mobility retail has, like any other business in this time, taken a hit. Coronavirus-forced lockdown has meant retail businesses have not been able to operate as normal for months with many closing down for prolonged periods and if not, just remaining operational for maintenance and service purposes.
Despite this, retailers managing to battle through the tough months knew the loyal customer base would return with many businesses reporting that this has by and large been the case. Those more optimistic about the months ahead were expecting a V-shaped economic recovery and while this has unfortunately not been the case, Britain is seeing a bounce back – although business is not booming just yet.
A slow start:
UK footfall recovery remained sluggish as the retail sector first looked to bounce back as lockdown restrictions ease. Shops in England reopened June 15, in Northern Ireland June 12, in Scotland mostly June 29, and in Wales June 22.
Footfall decreased 49.6% year on year during the third week of reopening in England and NI which compares to a decrease of 53.4% year on year for the previous week.
On high streets the decline was 55.7% year on year, comparing to a decrease of 58.1% year on year for the previous week. Retail Parks saw footfall decrease by 24.6% year on year. This compares to a decrease of 28.4% year on year for the previous week and shopping Centre footfall declined by 56.1% year on year which compares to a decrease of 60.7% year on year for the previous week.
Total Retail footfall for the week increased 15.3% week on week, with High Streets and Shopping Centres showing higher rises than for Retail Parks. On Saturday, July 5, as pubs and restaurants reopened in England, UK footfall saw a rise of 9.2% on the previous week. This was the smallest week on week rise for any day that week.
Commenting on this, Helen Dickinson, the BRC’s chief exec, said: “It remains a long way back to normality for the retail industry; two weeks after most shops reopened in England, footfall is still only half what it was a year ago.
“The reopening of pubs, cafés and other hospitality businesses this Saturday does not appear to have benefited shops much, with the Saturday showing more modest growth than the days prior to these locations reopening.”
Adding: “By European standards, the UK’s recovery remains slow, and while safety measures introduced by retailers have been well received by customers, many shoppers are still reluctant to visit physical shopping locations.
“On Wednesday, the Chancellor should announce measures to boost consumer demand – without it, the UK risks becoming an economic laggard in its coronavirus recovery. With the first shop closures being announced, the Government must act fast to protect the three million retail jobs, as well as millions more throughout the supply chain.”
That V-shaped economic recovery relied upon a consumer spending surge as Government allowed shops and businesses to reopen but as customers remained cautious, this was not the case.
However, as days turned into a few weeks, that consumer confidence started to grow and industries saw a spending return. According to a Barclaycard data report, Year-on-year consumer spending in June declined less than it has any other month since lockdown began.
The 14.5% decline from June 2019 was a marked improvement compared to earlier months in the year. However, the report suggested that the high street may have a long recovery period ahead as over half (56%) of consumers continue to avoid non-essential shops.
Spending on non-essential items fell 22.3%, an improvement on the decline seen in May (-36.9%) as the gradual re-opening of non-essential shops saw general retailers increase by 31.7%. Three in 10 Brits admit to delaying shopping because they are afraid of getting or spreading coronavirus, while 18% say they are put off by crowds.
New social distancing rules are providing some reassurance, with nearly a fifth more likely to return to shops because of these precautions. Meanwhile, spending on essentials has risen significantly in June, with a year-on-year increase of 6.6% compared to May’s 0.9% rise.
This was largely driven by shopping in supermarkets, said Barclaycard, with the category rising by 25.7% overall – its sharpest since the start of the year. Elsewhere, while overall spending on eating and drinking declined by 56.4% year-on-year, this represents a less steep drop than May (70.3%).
As time progressed over the month of July, the United Kingdom began to see steady growth in retail markets although it has not hit the heights it would be aiming for just yet.
On a total basis, sales increased by 3.4% in June, against a decrease of 1.6% in June 2019. It is the highest since May 2018, is the first growth registered since the lockdown and above the 3-month average decline of 6.4% and the 12m average decline of 2.1%.
In June, UK retail sales increased 10.9% on a Like-for-like basis from June 2019, when they had decreased 2.2% from the preceding year. In June, Like-for-like has been measured excluding temporarily closed stores but including online sales. The report shows how the figure is primarily driven by online sales.
Over the three months to June, in-store sales of non-food items declined 46.8% on a total and 11.3% on a Like-for-like basis. This is worse than the 12-month Total average decline of 16.5%. For June, the like-for-like excluding temporarily closed stores remained in decline.
Over the same period, Non-Food retail sales increased by 9.5% on a like-for-like basis and declined 15.0% on a Total basis. This is below the 12-month Total average decline of 6.2%. For the month of June, Non-Food was in slight growth year-on-year.
Online Non-Food sales increased by 48.2% in June, against a growth of 3.3% in June 2019. This is above the 12-month average growth of 17.1%.
It is worth noting that 2020 is a 53-week year in the ONS calendar: as a result of the extra week in January 2020, the comparable 2019 performances cited here may differ from those published last year, due to the one-week shift in the comparison.
Helen Dickinson OBE, chief executive of the British Retail Consortium, said: “June finally saw a return to growth in total sales, primarily driven by online as a result of lockdown measures being eased and pent up demand being released. Despite footfall still being well below pre-coronavirus levels, average spend was up as consumers made the most of their occasional shopping trips.
“Computing, furniture and home improvement all continued to do well as the public invested in home comforts and remote working. However, while categories such as food performed strongly, not all retailers can breathe a sigh of relief, with clothing, footwear, and health & beauty still struggling. All eyes are on next month now that pubs, restaurants and cafes have reopened, in the hope it brings a much needed boost to our high streets and shopping centres.”
She added: “Though a month of growth is welcome news, retail is not out of the woods yet. The pandemic continues to pose huge challenges to the industry, with ongoing stores closures and job losses across the UK.
“The reopening of shops is an important step on the road to recovery, but with months of rent building up, many shops will be forced to close unless action is taken before the next Quarter Rent Day. The Government must remain open to further action to boost consumer demand and should take steps to support with rent costs or the industry could suffer thousands of avoidable job losses.”