Coronavirus: 'Winners and losers' as UK retail sales recover

·Finance and policy reporter
Confederation of British Industry: 'This crisis has created winners and losers within the retail sector.' Photo: Andrew Matthews/PA Images via Getty Images
Confederation of British Industry: 'This crisis has created winners and losers within the retail sector.' Photo: Andrew Matthews/PA Images via Getty Images

A survey suggests many UK retailers have seen a recovery in sales in July, but experts warned of a stark divide among firms between “winners and losers” from the coronavirus.

Figures released by a leading business group indicate total revenues were normal for the time of year, with surging grocery, DIY and online sales masking stark declines in clothing, footwear, furniture, and goods from department stores.

A narrow majority of retailers said sales were up year-on-year in July, after three months of sharp declines. The number reporting sales were typical for the season reached its highest level since November 2019.

The figures suggest the reopening of non-essential retailers across the UK and easing of other lockdown rules since June has delivered a major boost to high street footfall.

READ MORE: Selfridges axes 450 jobs in ‘toughest year in recent history’

Rain Newton-Smith, chief economist at the Confederation of British Industry (CBI), which released the survey, warned its headline figures don’t “tell the whole story,” however.

“This crisis has created winners and losers within the retail sector and for some businesses the picture remains bleak,” she said.

Every grocery firm surveyed said sales were up year-on-year, and most retailers of ‘other normal goods’ —which includes cards, flowers, and stationery — reported gains. Online sales growth was particularly strong, and expected to pick up further next month. Car and other vehicle retailers also reported annual gains, the first increase since February.

But a majority of specialist food and drink, department store, clothing, footwear, furniture and carpet firms reported declines. Orders placed with suppliers also fell year-on-year for a fourth month, though at a slower pace than in June.

READ MORE: Greggs bakery sales at 72% of pre-virus levels

This month’s distributive trades survey (DTS) also only included responses from 133 businesses, 62 of them retailers. Separate surveys show footfall remains significantly lower than before the crisis in retail areas.

The data comes amid a wave of high-profile announcements of mass job losses at leading UK retailers in recent months as the pandemic has taken a heavy toll. Selfridges became the latest to wield the axe on Tuesday, confirming 450 roles were likely to be cut.

“The re-opening of non-essential retail was a vital step towards recovery but isn’t a cure-all,” said Newton-Smith.

“The government has provided critical support for firms and jobs throughout the crisis. But ongoing financial pressures are a major challenge for some retailers, and additional direct support to shore up cash flow, such as extension of business rates relief, should be considered.”

Ed Miliband, Labour's shadow minister for business, energy and industrial strategy, said: “While it's welcome that retail sales figures are up, we cannot be complacent with many parts of the sector still struggling. These figures reinforce the cause for concern for many non-food retailers including clothing, furniture and shoe shops.

”The UK is facing the biggest recession in 300 years and we are seeing a wave of redundancies. High streets are the backbone of communities across the country, and their continued vitality is absolutely essential to local economies and livelihoods.”