British retail sales jump back to pre-Covid crisis level        

A 70% surge in clothes and footwear sales is welcome on the high-street but is "not a sign that households overall spending is recovering fully"
British retail sales jump back to pre-Covid crisis level        

There has been a 70% surge in clothes and footwear sales in the UK. Picture: Dominic Lipinski/PA Wire

British retail sales jumped back almost to pre-coronavirus lockdown levels in June when non-essential stores in England reopened, giving a boost to beleaguered clothing stores.

Sales volumes in June leapt by almost 14% from May, above all forecasts in a Reuters poll of economists.

A 70% surge in clothing and footwear sales reversed much of their slump in recent months, though the sector remains one of the worst hit, with spending 35% below pre-pandemic levels.

Overall sales volumes rose to within 0.6% of February’s level. 

Excluding fuel sales, hit by less commuting and other travel, volumes were 2.4% higher than in February.

Household goods stores also saw strong sales in June especially for furniture and DIY materials. 

Home improvement retailer Kingfisher, which owns B&Q, this week forecast first-half underlying profit ahead of last year after exceptionally strong demand.

Retail sales represent only about a third of UK consumer spending, however, and other figures suggest people remain cautious about returning to places like bars and restaurants.

“The surge in retail sales volumes ... in June is not a sign that households’ overall spending also is recovering fully and rapidly,” said Samuel Tombs of Pantheon Macroeconomics.

V-Shaped recovery doubted by some economists

Britain’s economy shrank by more than a quarter in March and April and only recovered slightly in May when there was a limited relaxation of the lockdown imposed on March 23.

The Bank of England’s chief economist, Andy Haldane, says payments data has suggested a rapid, V-shaped recovery though many of his colleagues are doubtful about a sustained recovery.

The British Retail Consortium said earlier this month that spending among its members - typically large high-street chains - was 3.4% higher this June than last year.

The latest figures showed that retail sales slumped by a record 9.5% in the second quarter compared to the first.

Compared with June 2019, sales were down 1.6%, a smaller fall than 6.4% seen in the Reuters poll.

Online spending, which soared at the start of the lockdown, fell as a share of overall spending as shoppers in England were able to return to stores from June 15 onwards. But at 31.8%, it remained much higher than February’s 20%.

Consumer sentiment is still well below its level before the coronavirus struck Britain and cafes and restaurants have reported subdued demand since they reopened on July 4.

More than 45,000 people with COVID-19 have died in Britain, Europe’s highest death toll. 

Bank of England policymaker Jonathan Haskel said earlier this week that persistent health worries, as well as a jump in unemployment, risked halting the recovery. 

Reuters

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