Retail sales at second worst decline in 25 years - but fashion and beauty see boost from return of social gatherings

Retail sales decreased by 5.9 per cent in May in the second worst decline recorded since records began 25 years ago.

Shoppers are not likely to return quickly to the high street in large numbers.

Total in-store sales of non-food items declined 50.3 per cent over the three months to May, according to the Retail Sales Monitor from KPMG – and by 21 per cent in shops that have been open for more than a year. This was the worst performance since records began in January 1995.

However, the overall retail sales figure was an improvement over April, which was the lowest level on record.

Food sales enjoyed a boost as a combination of sunny weather and lockdown restrictions requiring people to meet only outside saw a rise in people enjoying barbecues.

The slight relaxation in restrictions also gave a boost to beauty and clothing sales as people who had previously seen only members of their own households smartened up for their first social gatherings in weeks.

Non-food sales across both online and in-store, however, decreased by just 2.1 per cent on a like-for-like basis and 21.8 per cent in total - below the 12-month total average decline of 6.4 per cent.

Helen Dickinson, chief executive of the British Retail Consortium, said: “Sales in May demonstrated yet another month of struggle for retailers across the country, despite an improvement on the previous month. Nonetheless, as the sun came out and restaurants lay dormant, food sales rose with consumers taking to their local parks for beers, BBQs and picnics.

“Clothing and beauty sales improved slightly on April, as people left their homes to meet outside with friends and family. Continuing the lockdown trend, office supplies, fitness equipment and bicycles all performed well, thanks to strong online sales and DIY was boosted by the opening of garden centres. However, for those shops whose doors remain shuttered it was once again a tough month and even those who stayed open suffered reduced footfall and huge costs implementing social distancing measures.”

She added: “There are concerns that if Government support is withdrawn too quickly, shops and businesses will not survive. Until the situation improves, retailers urgently need support on rents and negotiations with their landlords as high fees could force some physical retailers to shut for good.”

Sales of computing products have thrived as people are working and studying from home during lockdown, the report found, while sales of toys also held up well.

Paul Martin, UK head of retail at KPMG, said: “May presented yet another testing month for retailers, with total sales down by 5.9 per cent. The decline is less drastic when compared to April’s fall of 19.1 per cent, however we are comparing performance to the record low of May 2019.

“The disparity between different types of retailers and categories continues, with clear divides between essential and online versus non-essential and physical. Sales of computing equipment, toys and other household goods remained strong – especially online – with home-working and entertainment firmly at the forefront of consumers’ minds. Food and drink also performed well; no doubt encouraged by warmer weather and May’s bank holidays. By contrast, many non-essential categories – especially fashion – continued to attract limited demand which will increase the pressure on them in the coming months.”

He added: “As restrictions ease, retailers have much to consider during the pandemic’s recovery-phase. Stores may soon have the greenlight to re-open but it will be a gradual affair with safety front of mind, and some doors may not reopen at all. COVID-19 has acted as an accelerant in the shift towards having less of a physical presence, not least due to the obvious need to radically reduce costs for survival. We’re also witnessing historically high levels of sales transacted online – currently over 60 per cent – and while this will ease as more stores open, consumers have formed new habits that will see the online channel continue to be more prominent going forward.”

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