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Retails sales slump in January lockdown

Emma Lunn
Written By:
Emma Lunn
Posted:
Updated:
19/02/2021

Retail sales volumes decreased by 8.2% in January compared with December as tighter lockdown restrictions affected sales.

According to the Office for National Statistics, retail sales volumes were 5.5% lower than before the pandemic in February 2020.

Feedback from retailers suggested that the enforced closure of non-essential retail affected sales, although not to the same extent as witnessed in April 2020 (the first full month of the first lockdown) when total retail fell by 22.2% when compared with the February level.

All sectors saw a monthly decline in volume sales in January 2021 except for non-essential retailers and food stores, who reported growth of 3.7% and 1.4% respectively when compared with December 2020.

In the three months to January 2021, retail sales volume fell by 4.9% when compared with the previous three months, with strong declines in both clothing and fuel.

Online sales up

The proportion spent online soared to 35.2% in January 2021, the highest on record. This compares with 29.6% in December 2020 and 19.5% reported in January 2020.

All store types reported an increase in their proportion of online spending in January 2021 when compared with December 2020. Food stores reached an historic high of 12.2% of sales conducted online.

‘The edge of the abyss’

Maddy Alexander-Grout, founder of the small business national discount scheme, MyVIPCard, said: “January was one of the bleakest months yet for UK retailers, who were hit by the double whammy of post-Christmas belt-tightening and the latest national lockdowns.

“I have spoken to hundreds of local retailers so far this year and the harsh reality is that many are not just close to shutting up shop but are also mentally exhausted.

“Even when things return to a relative normal, things will be far from normal as so many smaller retailers will be paying off the debts they have accrued and loans they have taken out during the pandemic for many years to come.”

Ayush Ansal, chief investment officer at hedge fund Crimson Black Capital, said: “The third national lockdown has taken the UK high street to the edge of the abyss. For the average British retailer, the reopening of the economy as a result of the mass vaccination programme cannot come soon enough.

“January always sees a post-festive slump but this decline was far greater than expected. Sentiment on the high street is about as low as it gets after nearly a year of the pandemic. Consumers are increasingly looking spent-out and the high street is running on fumes as a result.”