UK retailers warn of shop closures and job losses amid lockdown

Consumer spending during coronavirus crisis is steepest drop since records began in 1995

Britain’s retailers have warned of the mounting risk of shop closures and job losses across the country after consumer spending plunged to record lows in April since comparable records began as the coronavirus lockdown took hold.

Reflecting the impact of lockdown measures across the country, the British Retail Consortium said sales fell 19.1% last month compared with April last year, in the steepest drop since the trade body for high street and online shops started recording sales in January 1995.

After Boris Johnson announced plans to keep most shops closed until at least June, the figures showed consumer spending on items other than food – at stores such as fashion outlets, furniture and jewellery shops – collapsed by more than a third over the past three months.

With much of the high street closed until at least the early summer, Helen Dickinson, chief executive of the BRC, warned businesses may be forced to close – threatening jobs and harming local communities – without continued government support.

She added: “Monday’s recovery strategy was an opportunity missed to provide a clear and detailed roadmap, outlining when and how shops will reopen after 1 June, so that retail can help get the economy moving and the public can get all the goods they need.”

Despite the precipitous decline in high street spending, the figures revealed a boom in sales online and for essential stores that remained open. Excluding shops that have been forced to close, consumer spending increased by 5.7%.

Reflecting a stockpiling surge at the onset of the crisis in March, food sales increased over the three months to April by 6%. Online sales excluding food items increased by 57.9% in April, significantly above the average annual growth rate of 8.5%.

Computing equipment, household gadgets, as well as toys and baby equipment were among the goods in high demand. With the country largely confined to staying at home during the health emergency, shoppers also rushed to buy games consoles, bicycles, sewing and knitting goods and office equipment for working at home.

Dickinson said the coronavirus outbreak had accelerated the trend for shoppers to increasingly purchase goods and services online. “It is likely that as the lockdown wears on, these new shopping habits will become more entrenched for many consumers.”

Separate figures from Barclaycard, which handles almost half of all credit and debit card transactions as Britain’s biggest credit card provider, indicated sales collapsed by 36.5% in April compared with a year earlier.

The figures also revealed a dramatic upturn in shopping for food at supermarkets as more Britons prepared meals at home, with sales climbing by 14.3%.

In a potential sign of lengthy queues at big retail outlets and difficulty getting slots for online delivery, the figures also showed specialist food and drink stores – including off licences, greengrocers and independent convenience stores – recorded an almost 40% rise in sales, as shoppers continued to support local businesses. Online spending on home improvement and DIY also increased by a quarter.

According to a survey of 2,000 adults conducted for Barclaycard, almost nine in 10 said they had saved money on everyday expenses since lockdown began. However, confidence over job security dropped sharply to 42%.

Esme Harwood, director at Barclaycard, said: “It’s been a tough time for retailers as consumer spending has dropped considerably under lockdown. There are some bright spots, though, as Brits have turned their focus online and looked to takeaways, digital subscriptions and DIY to keep entertained and occupied.

“A renewed sense of community may be welcome news for independent businesses, with a growing desire to support local stores in life after lockdown.”

Contributor

Richard Partington Economics correspondent

The GuardianTramp

Related Content

Article image
British retailers say closures and job losses still a risk despite lockdown easing
Trade body urges government to deliver on promise to reform business rates to protect sector

Larry Elliott Economics editor

10, May, 2021 @11:01 PM

Article image
Factory and shop closures 'will push UK into deep recession'
KPMG study finds GDP has already stalled as firms shut doors amid coronavirus crisis

Phillip Inman

22, Mar, 2020 @4:21 PM

Article image
England lockdown extension would be 'catastrophic for struggling retailers'
Trade body warns billions in Christmas sales at risk, leading potentially to more job losses

Zoe Wood

05, Nov, 2020 @12:01 AM

Article image
UK retailers face declining sales amid Covid-19 shutdown
Lockdown easing and price cuts fail to stop second successive slump in monthly sales

Phillip Inman

08, Jun, 2020 @11:01 PM

Article image
Retailers warn of fresh wave of job losses and store closures
British Retail Consortium says sales are down 2.7%, blaming uncertainty over Brexit

Larry Elliott Economics editor

03, Jun, 2019 @11:01 PM

Article image
Footfall down 75% as England's lockdown takes toll on retailers
BRC and ShopperTrak data shows new Covid controls brought halt to burst of activity

Larry Elliott Economics editor

10, Nov, 2020 @12:00 AM

Article image
UK retailers hit by first weekly fall in shoppers since Covid lockdown
End of holidays and reopening of schools result in fewer people visiting high streets

Richard Partington Economics correspondent

14, Sep, 2020 @11:36 AM

Article image
Shop prices rise amid driver shortages and Brexit red tape
Retail data shows 0.4% month-on-month increase in August, with 0.6% rise in non-food

Sarah Butler and Graeme Wearden

01, Sep, 2021 @5:01 AM

Article image
Return to work is too late to save city centre stores, warn retailers
Many hanging on by a thread as September rents approach, says British Retail Consortium

Larry Elliott Economics editor

07, Sep, 2020 @11:01 PM

Article image
Marks & Spencer holds huge sale after clothing piles up amid lockdown
Retailer offers discounts of at least 50% to shift unsold spring and summer styles

Zoe Wood

14, May, 2020 @1:10 PM