With Economy Reopening, Retail Spending Soars In The UK

After months of lockdown, retail shops have reopened in the United Kingdom and the British shoppers spend lavishly on new clothes in April, showed official data on Friday. According to experts, this was a further signal of a robust recovery of the economy from the pandemic slump.  

There was a 9.2 per cent month on month spike in retail sales volumes in April which was twice more than what was being expected by analysts. In March, there was a 5.1 per cent spike in retail sales in the country. Clothing sales soared by almost 70 per cent in April which was instrumental in the retail sale spike.

“Fashion retailers (were) the ultimate beneficiaries of beer gardens reopening and the ‘rule of six’ night out returning,” said Aled Jones, head of retail at Lloyds Bank.

With wealthier households spending savings built up during lockdowns, a surge in spending is being expected and a close watch on retail sales is being kept by policy maker at the Bank of England.

For the current year, prediction of economic growth of 7.25 per cent was made by the country’s central bank this month compared to a contraction of almost 10 per cent in 2020 – the biggest contraction of the economy in over 30 years.

However a major difference in this recession compared to previous ones is the much lower rate of unemployment because of an expensive government furlough programme that has provided relief to millions of employees.

The morale of the country in May was at the same level as it was in just prior to the country imposing its first lockdown in March 2020, showed separate data from Britain’s longest-running survey of consumer sentiment on Friday.

In April, retail sales were 10.6 per cent above their pre-pandemic level for the same month, said the Office for National Statistics. However the repeated lockdowns have severely hit many high-street shops as shopping shifted to online commerce.

After more than 240 years of trading, its last store was closed last month by department store Debenhams and the brand was purchased by the online retailer Boohoo.

After being forced to close again in January this year, retailers such as clothing and furniture stores were not able to reopen to shoppers in England until April 12. These retailers were marked as non-essential by the UK government.

In April, the share of spending of online retail dropped to 30 per cent compared to 34.7 per cent in March – marking the lowest since December. And with restaurants reopening for outside dining, spending by consumers at supermarkets also fell slightly on the month.

“Economic recovery will continue. It’s just it will be driven by a surge in spending in the pubs, restaurants and cinemas rather than the shops,” Capital Economics’ chief UK economist Paul Dales said.

(Adapted from BusinessOfFashion.com)

Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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