Consumer spending surges as lockdown restrictions end
Brits rushed back to the shops in June after lockdown restrictions ended, prompting the biggest jump in sales since May 2018 as consumers indulged in some much-needed retail therapy.
According to new data from the British Retail Consortium, total sales rose 3.4 per cent in June in the first month of growth since lockdown measures were put in place.
With most people set to continue working from home for the foreseeable future, computing, furniture and home improvement sales led the way, while food sales enjoyed another month of strong growth.
Figures from credit card provider Barclaycard backed up the findings, showing that spending on DIY and home improvement had picked up 31.3 per cent in June, with furniture expenditure also rising 17.6 per cent.
Spending on electronics was another bright spot, Barcalycard said with a 14.3 per cent year-on-year increase as the return of live sport – including the Premier League and Royal Ascot – led to increased purchases of home entertainment.
Over the last three months, the BRC said that food sales have increased 3.8 per cent in total, with last month’s spell of warm weather pushing consumers to spend more on barbeques and picnics.
However, experts warned that the sector, which has been one of few to do very well out of the lockdown period, would now face competition from reopened bars, pubs and restaurants.
Last week’s announcement by the chancellor that VAT on the hospitality industry would be cut will also likely encourage activity in the struggling sector.
BRC chief executive Helen Dickinson said that “all eyes” were now on pubs and restaurants, “in the hope it brings a much needed boost to our high streets and shopping centres”.
Retail sales also increased 10.9 per cent in June, but the BRC said the measure was mainly due to the continued strength of online sales rather than in-store purchases.
Paul Martin, head of UK retail at KPMG, which partnered with the BRC on the data, said that “whether consumers will forego the convenience of online shopping now that they’ve become accustomed to it” was the fundamental question for the sector’s future.
According to Barclaycard, over half – 56 per cent – of consumers are continuing to avoid the shops despite the lifting of lockdown measures, suggesting the high street’s recovery could be a slow and painful one.
And Dickinson warned that “retail is not out of the woods yet”.
“The pandemic continues to pose huge challenges to the industry, with ongoing stores closures and job losses across the UK”, she said.
“The reopening of shops is an important step on the road to recovery, but with months of rent building up, many shops will be forced to close unless action is taken before the next Quarter Rent Day.
“The government must remain open to further action to boost consumer demand and should take steps to support with rent costs or the industry could suffer thousands of avoidable job losses.”