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Retail Sales Dropped Sharply In July

High street shopping summer retail AmbrosiniV Shutterstock 1783336670

The ONS has reported on retail sales in July:

  • Retail sales volumes fell by 2.5% between June and July 2021; looking more broadly, however, they were up by 5.2% in the three months to July compared with the previous three months and are 5.8% higher than their pre-coronavirus (COVID-19) pandemic February 2020 levels.

  • Food store sales volumes fell by 1.5% in July 2021, following an increase in the previous month when sales were positively boosted by the start of the Euro 2020 football championship.

  • Non-food stores reported a fall of 4.4% in sales volumes in July 2021 when compared with June 2021, driven by falls in other stores (negative 10.1%), such as second-hand goods stores and computer and telecoms equipment stores. 

  • Automotive fuel sales volumes fell by 2.9% over the month, its first monthly fall since February 2021; with heavy rainfall in early July impacting road traffic volumes, automotive fuel sales volumes are now 6.7% below their pre-coronavirus pandemic February 2020 levels.

  • The proportion of retail sales online increased to 27.9% in July from 27.1% in June and remains substantially higher than the proportion of online retail spending in February 2020 (pre-coronavirus pandemic) of 19.8%.

  • Non-food stores (such as computer stores and sports equipment stores) reported a fall of 4.4% in monthly sales volumes in July 2021, with falls reported in each of its sub-sectors.

  • Sales volumes also fell over the month in clothing stores and household goods stores (both negative 2.0%) while sales volumes for department stores were the only sector to show an increase over the month at 0.2%.

  • Automotive fuel sales volumes fell by 2.9% over the month, its first monthly fall since February 2021. With heavy rainfall in early July impacting road traffic volumes, automotive fuel sales volumes are now 6.7% below their pre-coronavirus (COVID-19) pandemic February 2020 levels.

  • Food store sales volumes fell by 1.5% in July 2021, following an increase of 3.9% in the previous month when sales were positively boosted by the start of the Euro 2020 football championship.

  • Retail sales volumes over the last three months are up 11.1% on a year earlier, while July 2021 volumes are 2.4% higher than the same period last year. However, percentage change over the past year should be interpreted with caution because of base effects;  lower than normal retail sales in mid-2020, impacted by store closures, social distancing and other COVID-19 restrictions.

Commenting on the Office of National Statistics retail sales figures for July 2021, Lisa Hooker, consumer markets leader at PwC, said: 

“While the headline rate of growth slowed in July compared with June, retail sales were still comfortably ahead of both last year and pre-pandemic levels.

“So, although July saw slightly lower footfall on high streets and Team GB’s Olympic success did not have the same effect on spending as the Euros the previous month, consumers continued to be encouraged by record sentiment levels and were keen to spend their lockdown savings, despite the slight unwinding of pent-up demand that has fuelled retail sales over the last three months.

“One positive for the high street is that online has stabilised at around 28% of retail sales, compared with over 36% earlier in the year, showing that shoppers are increasingly confident to venture out onto high streets and retail parks.

“As we look ahead to the rest of the summer, the outlook continues to be rosy, with staycations encouraging retail spending at home rather than abroad, even if the full re-opening of leisure might somewhat divert spending from shops to restaurants, pubs and other venues. This should give the sector some respite as it recovers from the last tumultuous year, and with the prospect of a wind-down in government support such as business rates relief.”

Source : ONS, PWC

Image : AmbrosiniV / Shutterstock.com (1783336670)

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24 August 2021

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