UK retail sales rise again, beat expectations
By Michele Maatouk
Date: Friday 23 Oct 2020
(Sharecast News) - UK retail sales rose in September for the fifth consecutive month as they continue to recover from the Covid-19 slump, but analysts sounded a cautious note about the outlook.
Data released on Friday by the Office for National Statistics showed retail sales increased 1.5% on the month in September, beating expectations for a 0.4% increase. On the year, sales were up 4.7%, coming in ahead of expectations for a 2.7% jump.
When compared with pre-pandemic levels in February, total retail sales were 3.9% and 5.5% higher in value and volume terms, respectively.
In the three months to September, retail sales volumes rose 17.4% compared to the previous three months. This marked the largest quarterly increase on record as sales picked up from record-low levels earlier in the year.
Deputy national statistician for Economic Statistics Jonathan Athow said: "Retail sales increased again in September, the fifth consecutive month of growth since the record falls seen at the start of the pandemic.
"Food stores and online retailers have fared particularly well in recent months, and most other store types have now recovered to pre-pandemic levels too after being subject to temporary closures during restrictions in the spring. Spending on home improvement and gardening items in particular have boosted sales.
"Clothing store sales have been slower to recover and fuel sales remain subdued as people continue to work from home and have reduced the amount they travel."
ING economist James Smith said the UK's "remarkable recovery" was set to stall.
"Retail sales continue to exceed their pre-virus levels, but renewed closures in Wales and the knock-on effect of tiered restrictions elsewhere suggest revenues will come under renewed pressure on the high street, as we edge towards the key Christmas trading period," he said.
Howard Archer, chief economic adviser to EY Item Club, said: "Following the strong third quarter bounce back, the outlook for retail sales and consumer spending looks more challenging in the near term at least. This reflects increased restrictions on activity, possible markedly rising unemployment, limited earnings and mounting consumer caution.
"Indeed, Gfk has reported that consumer confidence has fallen in October to be at its lowest level since June. Meanwhile, latest data from Springboard show shopper footfall across all retail destinations fell 3.1% in the week to 17 October, which was a fourth successive decline. Furthermore, it has since been announced that non-essential retailers in Wales will be closed until 9 November."
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