Retail sales in March predictably plummeted and the month marked the worse drop since records began.
KPMG’s head of retail in the UK, Paul Martin, reflected on what it means for the retail sector as a whole.
He commented: “Retail sales experienced an historic drop in March, with COVID-19 changing the consumer landscape significantly. Lock down has prompted a fundamental rethink of what is deemed essential. Total sales may ‘only’ be down 4.3%, but the sharp divide between food and non-food, and between physical and online, is far more drastic.
“Also, the UK’s closure of non-essential stores only started at the backend of the month, so it’s likely worse data is yet to emerge.”
He continued: “Staying home has seen a surge in sales of food and drink; computing equipment, toys to keep children entertained, and unsurprisingly health-related goods too. Yet our high streets are completely void of footfall, and non-food categories like fashion have been forced into hibernation. With little alternative for non-essential retail on offer, online penetration has soared to 43.5%.”
Adding: “Non-essential retailers have had to immediately address cash preservation and liquidity, furlough parts of their workforce and understand how to access various government support schemes. Meanwhile, essential retailers have focussed on stabilising their supply chain and product availability, whilst focussing on the safety and welfare of their employees and customers.”
Martin concluded: “An uncertain future lies ahead and the industry’s reset button has clearly been pressed. Smart retailers will already be thinking about what this means for the future, but the resilience of the sector cannot be underestimated. Likewise, we cannot overlook the huge contribution many retail workers have made to help the nation during the crisis.”