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Retail shows signs of recovery but “little cause for optimism” says BRC

High Street

Retail showed some signs of recovery in July figures highlight but according to the BRC there is little cause for optimism.

On a total basis, sales increased by 3.2% in July, against an increase of 0.5% in July 2019.

This is above the 3-month average growth of 0.4% and the 12m average decline of 1.9%. It is the second consecutive month of growth since the start of the pandemic.

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In July, UK retail sales increased 4.3% on a Like-for-like basis from July 2019, when they had increased 0.3% from the preceding year.

In July, Like-for-like has been measured excluding temporarily closed stores but including online sales.

Over the three months to July, in-store sales of non-food items declined 29.3% on a Total and 11.3% on a Like-for-like basis. This is worse than the 12-month Total average decline of 17.7%. For July, the like-for-like excluding temporarily closed stores remained in decline.

In the same period, non-food retail sales increased by 7.9% on a like-for-like basis and declined 4.3% on a Total basis. This is above the 12-month Total average decline of 6.1%. For the month of July, Non-Food was in growth year-on-year.

Online Non-Food sales increased by 41.0% in July, against a growth of 3.7% in July 2019. This is below the 3-mth average of 49.7% but above the 12-mth average of 19.9%.

Non-Food Online penetration rate increased from 29.7% in July 2019 to 42.0% this July.

Helen Dickinson, the BRC’s chief executive, said: “July saw the second month of growth as lockdown measures eased and demand gradually began to return in some places. Many shops continued to struggle as footfall was down, with many people still reluctant to go out, and fewer impulse purchases.

“The strongest performance came from food, furniture and homeware, as consumers increasingly invest in their time at home, however, many shops, particularly in fashion, jewellery and beauty, are still struggling to survive. Online sales remained buoyant, slowing only slightly despite more shops reopening.”

Adding: “While the rise in retail sales is a step in the right direction, the industry is still trying to catch up lost ground, with most shops having suffered months of closures. The fragile economic situation continues to bear down on consumer confidence, with some retailers hanging by only a thread in the face of rising costs and lower sales.

“Rents are also continuing to accumulate and the next Quarter Rent Day could see many otherwise viable businesses fall into insolvency, costing stores, jobs and economic growth. The Government should adopt the proposal from landlords and tenants for a Property Bounceback Grant, which would deliver £7 billion in tax revenue to the Exchequer and save 375,000 jobs.”

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Alex Douglas

The author Alex Douglas

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