September retail sales continue revival but it’s still tough out there for clothing

Covid-19 News | Reports | Retail

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

The retail recovery revved up again in September with sales increasing by another 1.5%, which means volumes are now 5.5% higher than in February, but it’s become clear just how dramatically the crisis has changed the shape of the industry.

The pandemic has revolutionised the way we shop, as more consumers have switched to online stores and opt for click and collect services from the high street. With restaurant dining curtailed, due to social distancing and the 10 pm curfew, the food and grocery sector is profiting with sales volumes in food stores 3.7% higher in September than before the pandemic.

Rather than switch back to old habits, consumers seem to have embraced the transition to online. While there was a small decrease in online purchases across all sectors in September, they still represent 27.5 % of all sales, a significant step up from February when we ordered just 20.1% online. As we’ve seen from recent results, ASOS, Next and Tesco were perfectly placed to capitalise on the accelerated shift to online shopping. They collected the clicks on a huge scale as customers ordered from their sofas, without the need to navigate the aisles.

It’s still extremely tough for the fashion sector, as clothing sales in September were still 12.7% below pre-pandemic levels. With the Christmas party season cancelled and little need to refresh wardrobes, there seems to be a reduced appetite to invest in new seasonal 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 8.6% below February.

Overall footfall is 70% below the pre-pandemic level, but retail parks – where parking is abundant and social distancing restrictions easier to observe – have fared better.

DIY seems to have become a national pastime as sales of home improvement products in particular continue to do well. People are clearly continuing those projects which they began or planned in lockdown, with sales in household goods stores increasing by 11% compared with February.’

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