Hundreds of thousands of jobs in the retail sector are at risk of being lost amid the Covid-19 crisis, the British Retail Consortium has warned.
Sales at shops across Britain fell to their lowest level on record last month, with worse figures yet to come, the BRC said.
With ‘non-essential’ bricks-and-mortar shops shut up and down the country, retail sales fell 4.3 per cent year-on-year last month, marking the steepest decline since records at the BRC began in January 1995.
Thousands of retail workers have already been furloughed, while some big name brands like Oasis and Warehouse, already battling against dwindling sales, have been pushed into administration by the crisis.
Dire: Hundreds of thousands of jobs in the retail sector are at risk of being lost amid the Covid-19 crisis, the BRC has warned
Snapshot: A chart showing how retail sales have slumped in the past month
Weekly figures: Here is how food and non-food sales have fluctuated in the last few weeks
In the first few weeks of March, retail sales increased by 12 per cent, but in the two weeks after lockdown they fell by 27 per cent, the BRC said.
Fresh figures from Barclaycard this week also revealed that consumer spending fell by 6 per cent year-on-year in March.
Taking a closer look at the BRC’s latest retail figures, demand for clothes dropped sharply in the last few weeks, pushing retailers to launch swathes of promotional deals and sales in a bid to flog stock.
BRC boss issues warning over jobs
Helen Dickinson, the boss at the British Retail Consortium, said today: ‘Many physical non-food retailers have been forced to shut down entirely or to limit themselves to online only to protect customers and staff.
‘Consequently, hundreds of thousands of jobs at are risk within these companies and their supply chains.
‘We welcome the government’s actions to date, yet millions of livelihoods rely on their continued support.’
The retail sector has found itself at the epicentre of the Covid-19 crisis on a financial level, with big-name brands and smaller independent retailers all forced to close their bricks-and-mortar stores unless they sell ‘essential’ goods. While some have already collapsed, others like Cath Kidson and Debenhams remain on the brink.
Helen Dickinson, chief executive of the BRC, thinks the aftershock tremors from the crisis for the retail sector will be ‘felt for a long while yet.’
Commenting on the BRC’s latest round of figures, Ms Dickinson said: ‘In March, the necessary measures to fight the spread of coronavirus led to the worst decline in retail sales on record.
Fallen: Warehouse and Oasis have fallen into the hands of administrators
No travel: Shops are shut and people are not travelling for work or to shop
Essential: Supermarkets saw a surge in demand as the lockdown kicked in last month
‘Furthermore, the headline figure masked even more dramatic swings: food and essentials faced an unprecedented surge in demand in the early part of March, only to drop significantly into negative growth after the lockdown and introduction of social distancing in stores.
‘The closure of non-essential shops led to deserted high streets and high double-digit declines in sales which even a rise in online shopping could not compensate for.’
An ‘unprecedented surge’ in demand for food and essentials earlier in the month was followed by a steep drop-off in sales as high streets became deserted.
Paul Martin, UK head of retail at KPMG, said: ‘Non-essential retailers have had to immediately address cash preservation and liquidity, furlough parts of their workforce and understand how to access various Government support schemes.
‘Meanwhile, essential retailers have focused on stabilising their supply chain and product availability, whilst focusing on the safety and welfare of their employees and customers.
‘An uncertain future lies ahead and the industry’s reset button has clearly been pressed.’
In a green shoot of hope, sales of computers, board games and fitness equipment all grew sharply in the last few weeks, as people grapple with home working and keeping households occupied, the BRC said.
What are Britons still buying?
Barclaycard data this week revealed that consumer spending fell by 6 per cent in March, marking the biggest drop since its records began in 2015.
It found supermarket spending rose 21 per cent, but that travel spending, including public transport, sank by 40 per cent and consumer confidence hit an all-time low.
Consumer confidence dropped to its lowest level since Barclaycard started its survey, with just a quarter of adults feeling upbeat about the state of the UK economy.
Amid all the dismal spending news, there were, however, some bright spots.
Go local: People are now spending more money at local greengrocers to get vital supplies
Spending at specialist food and drink stores, such as off-licences and greengrocers, grew by 30.5 per cent last month, with a growing number of shoppers choosing to buy locally and support independent retailers.
More time at home led to digital content and subscription spend rising 17.4 per cent as people entertained themselves by playing digital games, watching boxsets and accessing streaming services.
Online purchases swelled by 5.5 per cent in March, while in-store transactions on the other hand, dropped 4 per cent, Barclaycard said.
Depressing figures from the Office for Budget Responsibility posted earlier this week suggested that Britain’s gross domestic product could fall by as much as 35 per cent this quarter, with a 13 per cent drop for the year.
Laura Suter, an analyst at AJ Bell, said: ‘With no sign of the lockdown ending soon we’d expect April’s figures to paint an even bleaker picture for some retailers and travel companies, while the supermarket spending may tail off slightly as the panic of stockpiling now appears to have died down.
‘Judging by the wait times on deliveries online orders are continuing to boom, with retailers and DIY stores being inundated with customers.’
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