UK retail sales rise above pre-pandemic levels despite High Street bloodbath

Retail sales volumes rose a better-than-expected 3.6% in July and are now above pre-pandemic levels, official figures showed today.

Data from the Office for National Statistics showed that sales rose 2% excluding fuel, compared with a forecast of 0.2% by economists, and a 13.9% bounce in sales in June. Including fuel sales rose 3.6%, against an estimate of 2%, and are 3% above pre-pandemic levels recorded in February.

Online retail sales fell by 7% in July when compared with June, but the strong growth experienced over the pandemic has meant that sales are still 50.4% higher than February’s pre-pandemic levels, the ONS said.

Non-essential stores were forced to close in late March due to the virus lockdown, but were able to reopen on June 15.

Retailers reported a huge spike in online sales but the impact of the forced closures on High Street stalwarts has already been shown. WH Smith, John Lewis and Boots are among those to cut thousands of jobs, with Marks & Spencer this week saying it will cut 7,000 jobs over the next three months.

Sports Direct owner Frasers yesterday said the High Street is “in ruins”, but added that shopping conditions were starting to return to some form of normality.

Jon Hudson, UK equities investment manager at Premier Miton, said: “The numbers are encouraging with growth of 3% compared to last July. Consumers are currently relaxed on their personal finances having saved over lockdown and on their likely overseas summer holiday, although this may change when government support pares off over the autumn.

"Having spent so much time in it recently, consumers are unsurprisingly spending on their homes while online growth continues to be very strong at the expense of the high street, offering little respite for struggling bricks and mortar retailers.”

As of July, clothing sales were 25.7% lower than February. Household goods and DIY stores have enjoyed a strong recovery by comparison, and sat 6% above February levels in July, with stores reporting an increase in people carrying out home projects.

But total non-food store sale volumes were 6.6% lower than their pre-pandemic levels, with the DIY sector unable to offset the fashion stores.