UK retail enjoys best quarter on record as sales surge 13.1 per cent

Retail sales have seen a record increase over the past three months, amounting to the ‘best quarter on record’ with shoppers returning to stores in force since the easing of lockdown restrictions back in April.

According to the latest BRC-KPMG retail sales monitor, total sales in June increased 13.1 per cent against a decline of 1.3 per cent in June 2019, fuelled by stores re-opening and the continued allure of online shopping.

On a like for like basis, UK retail sales increased 17 per cent from June 2019, when they had decreased 1.6 per cent from the preceding year.

Helen Dickinson, chief executive of the British Retail Consortium, said: “The second quarter of 2021 saw exceptional growth as the gradual unlocking of the UK economy encouraged a release of pent-up demand built up over previous lockdowns.

“In June, while growth in food sales begun to slow, non food sales were bolstered by growing consumer confidence and the continued unleashing of consumer demand. With many people taking staycations, or cheaper UK-based holidays, many have found they have a little extra to spend at the shops, with strong growth in-store in June.”

The good news for retail hasn’t, however, come without its warning, and Dickinson has suggested that UK retail is still ‘facing strong headwinds’ with many retailers ‘still making up for ground lost during the previous lockdowns.’

Footfall in city centres remains low, while international tourism is still well below pre-pandemic levels.

“Consumer comfort with the next stage of the roadmap will be key to the ongoing success of retail. Many customers are looking forward to a return to a more normal shopping experience, while others may be discouraged by the change in face covering rules.

“The government will need to reassure the public on safety, while pushing forward with its hugely successful vaccination programme.

“The public will also need to be understanding of one another during the easing of restrictions; there has been a big rise in violence and abuse against retail workers during the pandemic and colleagues cannot be put in the firing line because of this change in policy.”

Paul Martin, UK head of retail at KPMG, added: “Retail sales growth continued in June, albeit at a slower rate as the re-opening of hospitality and leisure sectors led to a dilution in consumer spending. The fight for share of wallet is underway, as consumers unleash pent up demand for social activities as restrictions in the UK continue to unwind.

“While the high street saw continued growth in June, with sales up 10 per cent, online sales fell back by seven per cent compared to June 2020.  However, penetration rates for online sales remain much higher than their pre-pandemic levels, suggesting the shift to online is here to stay.

“Retailers are facing challenges on a number of fronts, particularly convincing consumers that it’s safe to shop in store as restrictions around mask wearing and social distancing come to an end. With travel now looking to be back on the agenda for summer and Government COVID-19 support packages slowly coming to an end, retailers will be hoping that the feel good factor from Euro 2020 and lifting of COVID-19 restrictions will give the high street the summer boost it needs.”