UK retail sales fall for first time in months in weak start to 2021
January’s 8% decline provides the year’s first measure of the scale of the impact from coronavirus
UK retail sales in January fell on an annual basis for the first time since June, missing forecasts as tougher coronavirus restrictions inflicted more pain on the high street.
The volume of retail sales slid 8.2 per cent last month compared with December, the Office for National Statistics said on Friday.
This is a much larger fall than the 4.1 per cent drop in November, when England was previously in lockdown and a bigger contraction than the 2.6 per cent drop forecast by economists polled by Reuters.
“The latest national lockdown led to a sharp monthly fall in January’s retail sales, with April 2020 the only month on record to see a bigger slump,” said Jonathan Athow, deputy national statistician for economic statistics. “Department and clothing store sales were particularly affected this month.”
Compared with the same month a year ago, sales were down 5.9 per cent, the first annual contraction since June.
However, the contraction was milder than in April, a sign that businesses and consumers may be adapting to Covid-19 restrictions, particularly thanks to strong internet shopping.
Online accounted for 35 per cent of the total in January, the highest on record. This rose from 29.6 per cent in the previous month and 19.5 per cent reported in the same month last year.
The share of ecommerce rose in all store types, reaching a historic high of 12 per cent in food stores.
However, given the rapid vaccine rollout and prospects of reopening, economists and consultants forecast sales to rebound in the next few months.
“We think the tide will turn by spring, leading to a real uptick in sales,” said Duncan Brewer, partner for retail and consumer goods at the consultancy Oliver Wyman Digital. “With the vaccine programme well under way, a flurry of spending will be driven by older parts of the population.”