August retail sales rebound as online soars – but it’s still tough out there for clothing

Written by Susannah Streeter, Senior Investment and Markets Analyst, Hargreaves Lansdown

The retail recovery revved up a gear again in August with sales increasing by another 0.8 per cent, which means volumes are now 4% higher than in February, but it’s become clear just how dramatically the crisis has changed the shape of the industry.

The pandemic has brought about a revolutionary shift in the way we shop as consumers have switched to online stores and opt for click and collect services from the high street.

As the sector has re-opened, rather than switch back to old habits, consumers seen to have embraced it as a longer term change as although there was a small 2.5% decrease in online sales in August, they were still 46.8% higher than February.

It’s still extremely tough for many bricks and mortar fashion stores as clothing sales in August were still 15.9% below pre-pandemic levels. That is also partly likely to be because city centres remain so quiet. With many people still furloughed or working from home, the impact on shop in streets that used to be crowded with workers has been devastating. 87% of clothing stores reported a fall in footfall in the government’s most recent business impact of the cororonavirus survey, highlighting why so many are struggling to bounce back.

Half of all food stores also reported a dip in footfall in August, and large retailers say food and drink sales fell, which partly shows the success of the Eat Out to Help Out scheme as consumers switched from dining in to dining out, taking advantage of the cheap deals.

Wielding a paintbrush seems to have become a national pastime as demand for DIY products and paint in particular continues to be strong. People are clearly continuing those home improvement projects which they began or planned in lockdown, with sales in household goods stores increasing by 9.9% compared with February.’