UK retail sales rose in May and June due to impact of Euro 2020
According to the Office for National Statistics (ONS), retail sales in the UK soared between May and June, as millions embraced the Euro 2020 football tournament.
The event boosted demand for retail, food and drink – and sales rose 0.5% month-on-month following a fall in May. June saw retail sales 9.5% higher than what they were before the pandemic in February 2020.
ONS stated: “Feedback from some retailers suggested that sales were positively boosted in June by the start of the Euro 2020 football championship.”
Online sales remained substantially higher than before the pandemic, however, the total proportion of sales online decreased to 26.7% in June 2021, down from 28.4% in May 2021.
Food store volumes rose 4.2% compared to May, as spending around the Euros boosted trade, but sales of clothing fell by 4.8% and sales in household goods stores was down 10.9%.
High street footfall in the week ending July 17th saw a weekly increase of 3%, its first rise since the start of June.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
The Euros kicked off a spell of celebratory spending as national teams progressed through the tournament, fans splashed the cash on food and alcohol. Beers, pizza and BBQ treats flew off the shelves, boosting spending in food stores by 4.2%. That marked a turnaround compared to May when the re-opening of indoor dining led to a decline in retail food sales. The fickle nature of our spending patterns has continued with spending on clothing falling out of fashion again, with volumes down by 4.8%. In many homes it seems the love of football overtook passion for other hobbies in June. With eyes glued to screens for matches, the love affair with DIY seems to have waned. Household goods stores saw a fall in sales volumes of 10.9% in June although supply chain problems causing a shortage of popular goods on shelves may also be behind the drop compared to May.
Spending overall though on furniture and items for the home is still 15.8% above their pre-pandemic levels, indicating plenty of people are doing up their pads, partly because they still spend so much more time at home.
A new ethical trend of shopping appears to be developing with a rise in spending in charity shops accounting for a large part of the 8.6% growth in other non-food stores. With so many people clearing out pre-loved items, shoppers are going bargain hunting in stores, attracted by the triple benefits of contributing to a good cause, cutting down on waste and saving pounds.
The novelty of browsing in real instead of virtual stores hasn’t yet worn off. The amount of money we spent online fell in June by 4.7% compared with May, with shopping now entwined in our social lives once more.
Other research from the ONS this week showed that in July shoppers have continued to cool down from the hot pace of spending the sector saw in the spring. In the week to 15 July 2021, spending on debit and credit cards fell by 5 percentage points from the previous week, coming in at 92% of the level in February 2020. A fall in social spending is partly behind the drop, with people splashing less cash on restaurants, hotels and air travel.
People are clearly fed up with playing the traffic light guessing game and many have ditched plans for holidays abroad.
Delayable spending on goods like clothing and cars is also at 85% of the level in February 2020, indicating caution is once again becoming the name of the game, as concerns about the spread of new variants rise.
Data indicates that fortunes are looking up a little for the high street as more customers return, partly as football fever has subsided. The latest ONS economic report highlights Springboard research which shows that high street footfall in the week ending July 17th saw a weekly increase of 3%, its first rise since the beginning of June 2021, creeping back up to 70% of pre-pandemic levels. But retail parks remain the most popular location to splash the cash. Footfall has bounced back in out of town centres to 99% of levels witnessed before the crisis hit.
Eric Hazan, Senior Partner at McKinsey
The delay in ‘Freedom Day’ didn’t stop the retail sector from getting a boost. Football fever swept the food category, giving it a 4.2% increase. Whilst the appetite to travel, saw automotive fuel sales increase by 2.3%. The road to economic growth continues to be very category specific. It’s the ability to predict these category peaks that will help retailers outperform their rivals.”
The appetite for in-store shopping is increasing as vaccinated consumers look for more in-person experiences. Yet, digital stickiness remains substantially higher than before the pandemic. It’s the convenience and safety of online shopping that continues to pull in consumers.