Despite a positive August, retailers still “hanging by a thread” says BRC

Retail sales continued to recover in August, but remain down overall since the start of the COVID-19 pandemic.

This is according to the latest BRC-KPMG retail sales monitor, which showed that UK retail sales increased 4.7 per cent on a like-for-like basis from August last year.

On a total basis, sales increased by 3.9 per cent last month, which is the best growth since May 2018, excluding Easter distortions.

Over the three months to August, non-food retail sales increased by 7.7 per cent like-for-like basis and 1.4 per cent on a total basis over the same period.

In addition, online non-food sales increased by 42.4 per cent last month, against a growth of just over one and a half per cent in August last year.

Online sales are “continuing to boom”, said the British Retail Consortium’s Chief Executive, Helen Dickinson, despite shops reopening in June.

“Lockdown appears to have permanently changed some consumers’ shopping habits,” she commented, adding: “Remote working has continued to help sales in home goods, such as TVs, computing and furniture.”

Ms Dickinson (pictured) added that city centre retailers are continuing to be devastated by low footfall and poor sales, as office workers stayed away from high streets for another month, according to the data.

BRC CEO Helen Dickinson“Many retailers are continuing to struggle,” she continued. “With rents accumulating, many retailers are hanging on by a thread. Unless businesses and government can successfully persuade office workers back into city and town centres, some high street retailers will be unable to afford their fixed costs. Government will need to act fast or September will see more shops close and more job losses realised.”

Looking the success of online channels, Paul Martin, UK Head of Retail at KPMG, said penetration rates are still high at 39.3 per cent for non-food in August, adding that the vast majority of online categories realised significant growth.

He said: “Clearly retailers have some serious thinking to do around what the future of the industry is going to be exactly. While the overall online penetration rate has declined in recent months, the significant acceleration of the channel is here to stay. With this in mind, retailers need to focus on the cost of doing business, as online is generally more expensive to operate.”