Tuesday 13 July 2021 6:00 am | Updated: Tuesday 13 July 2021 9:12 am

UK retail sales post strongest quarter on record

People wear face masks while shopping at Covent Garden on 4 July, 2021 in London. Robert Jenrick, the minister for housing communities and local government, said in a TV interview on Sunday that compulsory mask wearing would soon end (Photo by Hollie Adams/Getty Images)

UK retail sales posted their best quarter on record as the lifting of Covid restrictions and Euro 2020 triggered a burst in consumer spending, according to new figures released today.

Figures from the British Retail Consortium and KPMG show retail sales surged 10.4 per cent in the second quarter of this year compared to the same period in 2019, before the onset of Covid.

Sales also grew 28.4 per cent compared to the second quarter of 2020, the highest rate of growth since the BRC and KPMG started tracking the figures in 1995.

Over the month, total sales jumped 13.1 per cent compared to June 2019. On a like-for-like basis, UK retail sales were up 17 per cent compared to June 2019.

The elevate growth rate indicates that a stronger stream of pent-up demand was released over the course of the latest round of Covid restrictions being eased compared to the unlocking in the summer of last year.

Restrictions on foreign travel meant consumers were likely diverting money from holidays abroad to spending on retail purchases.

Euro 2020 drove an increase in demand for electronics, TVs and match-day essentials. Total in-Store sales of non-Food items dropped 0.1 per cent, but increased 47 per cent on a life-for-like basis, the BRC and KPMG said.

Helen Dickinson, chief executive of the British Retail Consortium, says: “The second quarter of 2021 saw exceptional growth as the gradual unlocking of the UK economy encouraged a release of pent-up demand built up over previous lockdowns.”

“With many people taking staycations, or cheaper UK-based holidays, many have found they have a little extra to spend at the shops, with strong growth in-store in June. Fashion and footwear did well while the sun was out in the first half of June, while the start of Euro 2020 provided a boost for TVs, snack food and beer.”

Over the three-months to June, total non-food retail sales jumped 12.4 per cent and 45.2 per cent on a like-for-like basis, above the 2019 total average decline of 1.3 per cent.

Online retail sales growth slows

Online non-food sales were up 31.3 per cent in June, against a growth of 1.5 per cent in June 2019. However, this is below the 3-month average of 40.3 per cent.

Paul Martin, UK head of retail at KPMG, says: “Penetration rates for online sales remain much higher than their pre-pandemic levels, suggesting the shift to online is here to stay.”

Retailers facing severe headwinds

Despite the strong sales figures, retailers are facing strong headwinds in the form of consumers being reluctant to return to stores amid lingering concerns over catching Covid.

Dickinson said: “Consumer comfort with the next stage of the roadmap will be key to the ongoing success of retail. Many customers are looking forward to a return to a more normal shopping experience, while others may be discouraged by the change in face covering rules.”

“Retailers are facing challenges on a number of fronts, particularly convincing consumers that it’s safe to shop in store as restrictions around mask wearing and social distancing come to an end” Martin added.