Retail sales soar in a pre-lockdown splurge and the shift to online accelerates

Covid-19 News | Latest News | Reports | Retail

Susannah Streeter, Senior Investment and Markets Analyst, Hargreaves Lansdown

Shoppers piled through the doors of real and virtual stores in October in a pre-lockdown splurge with sales increasing for a sixth consecutive month. Christmas shopping kicked off early with retailers offering discounts to lure customers in. Overall sales rose by 1.2% compared to September, with sales up 7.9% when compared with February before the pandemic hit the economy. However, fresh lockdowns in the middle of peak festive shopping season will mean many retailers will still be facing a nightmare before Christmas.

The digital shift to online sharply accelerated again as looming lockdowns led to more shoppers filling virtual baskets instead. Online sales roared ahead by 52.8%, which may partly be due to the closure of many non-essential stores in Wales during its firebreak lockdown. The proportion of online sales again increased to 28.5% compared to 27.6% in September.

Grocery deliveries have again soared in popularity with online food sales nearly doubling in October, while purchases in store fell by just over 2%.

This latest waves of lockdowns across England and vast swathes of Scotland is going to force even more sales online as non-essential retailers are forced to shut up shop once again. Although that may benefit chains with a highly efficient digital offering, huge volumes could cause bottlenecks and delivery delays, while retailers with a large bricks and Grocery deliveries have again soared in popularity with online food sales nearly doubling in October, while purchases in store fell by just over 2%.

This latest waves of lockdowns across England and vast swathes of Scotland is going to force even more sales online as non-essential retailers are forced to shut up shop once again. Although that may benefit chains with a highly efficient digital offering, huge volumes could cause bottlenecks and delivery delays, while retailers with a large bricks and mortar footprint are likely to struggle to make up lost sales.

It’s still extremely tough for the fashion sector on the high street with in store sales falling by more than 22%. Although online sales grew sharply by around 17%, with the Christmas party season cancelled and little need to refresh wardrobes there seems to be little appetite to invest in new styles.

City centres remain quiet, with many people working from home, which has had a severe impact on shops in streets that used to be crowded with workers. Petrol forecourts are also quieter with fuel sales 8.8% below February, as car use fell once again.

Although it appears many more consumers got ahead of the game in October and started stockpiling presents before lockdowns took hold, the bulk of purchases will still need to be made. With many essential shops shut across the country, the virtual tills are likely to keep ringing as consumers shop from their sofas, at the expense of bricks and mortar retailers.

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