AECE The Apparel Export Council of Egypt
UK retail sales edged up in June from the month prior but consumer demand for apparel continues to wane with sales volumes at clothing stores falling by 4.7%
The latest data released today (23 July) by the Office for National Statistics (ONS) shows overall UK retail sales volumes increased by 0.5% between May and June 2021, and were up 9.5% when compared with their pre-coronavirus (Covid-19) pandemic February 2020 levels.
Clothing and department stores, however reported monthly decreases of 4.7% and 3.6% respectively. The decline at apparel retailers comes after a 2.5% drop in sales last month when compared to April.
Meanwhile, the proportion of retail sales conducted online remains substantially higher than before the pandemic, but in June most retail sectors reported a fall in their proportions of online sales as consumers returned to physical stores.
The total proportion of sales online decreased to 26.7% in June, down from 28.4% a month earlier.
Online spending values were also down, falling 4.7% in June when compared with May, with all sectors except clothing stores reporting monthly falls in their online sales. Feedback from retailers suggested that the easing of retail restrictions had affected online sales as consumers returned to physical stores.
This resulted in a decline in the proportion of online retail spending values, which fell to 26.7% from 28.4% in May 2021. This is the fourth consecutive monthly fall in the proportion of online spending. However, this is higher than the proportion of online retail spending in February 2020 (pre-pandemic) of 19.9%.
Stumbling block
Lynda Petherick, head of retail for Accenture UK and Ireland, notes after stages one to three of the UK Government’s roadmap out of lockdown passed without incident, June saw the first stumbling block as the near total easing of restrictions was pushed into July.
“Nonetheless, June was a month of progress for a sector desperate to return to “normal”, as shoppers hit the supermarkets to stock up on food and drink for Euro 2020.
“The question now for retailers of all sizes will be whether this run can continue in the face of fresh challenges. With the long-anticipated “freedom day” finally arriving this week, retailers are grappling with high numbers of staff self-isolating and issues with reduced stock, with some stores operating on reduced hours or even closing for periods of time. These are all challenges which could impact July’s figures.
“Going forward, retailers will also do well to finetune any potential supply-chain issues now, while they are still benefiting from pent-up consumer demand, rather than waiting for retail’s end of year busy season when it may be too late.”
Sachin Jangam, partner for retail at Infosys Consulting, points out the fact that UK retail sales volumes rose by 0.5% shows that shoppers have wasted little time getting out and spending.
“The Euros excitement has inevitably boosted this, with consumers making the most of the sunnier weather and newfound freedom to host guests, with the main driver of growth coming from food and drink sales.
“This is welcome news, but retailers must take it with a pinch of salt. Despite the rise in activity following ‘Freedom Day’, we may see a petering off of brick-and-mortar sales as concerns about virus transmission are brought back to the front of shoppers’ minds. Physical retailers need to invest in creating a personalised, valuable experience that customers can be confident in. This goes further than just offering the products they need, by also providing the social, enjoyable and safe experience that so many are currently seeking. To achieve this, retailers need to invest in understanding their customers, by collecting and understanding consumer data through effective digital marketing engagement programmes.
“Agility in the buying process will also be vital for retailers in the coming months. As the return to travel ensues and with staycations picking up, we will see heightened sales activity linked to summer clothing, shoes, and other holiday essentials. A busy July and August will be an opportunity to make back the considerable losses experienced over the past year before things calm down in September, but only if retailers have the stock ready. This preparedness will be difficult to achieve but can be helped along by analysis of consumer shopping patterns and behaviours, and even predictive AI and ML tools to forecast short-term demand.”
By Just Style