Yahoo Finance Coronavirus: 'Retail armageddon' as UK shops suffer record slump
UK retailers suffered their steepest fall in sales on record in March, official figures show as the coronavirus lockdown ravages the sector.
Office for National Statistics (ONS) figures published on Friday showed a 5.1% slump in the volume of sales between February and March, the biggest fall since the data series began.
The dismal figures sparked warnings of “retail armageddon” and a steep drop in Britain’s quarterly GDP, with a separate survey also showing consumer confidence near record lows.
Many stores were forced to shut up shop by the government’s lockdown announcement on 23 March, and April figures are widely expected to be even worse.
The number of clothing store sales dropped 34.8% on the previous months, and fuel sale volumes were down 2%.
Food and ‘non-store’ retail were the only sectors to show growth. Food sales were up 10.4% in the strongest month of growth on record. Shoppers stocked up with more households confined to their homes, and retailers highlighted growing ‘panic buying’ particularly in supermarkets.
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‘Non-store’ retail such as online sales also soared, up 5.1% in value with many retailers continuing to offer deliveries. Many commodities other than clothing saw increased sales.
Thomas Pugh, UK economist at Capital Economics, said a far steeper decline of up to 30% was likely in April, as the March figures include several weeks of trading before the lockdown.
“Clearly there is huge uncertainty as to how deep the downturn proves and how long restrictions remain in place, a fall in the region of 25% in GDP over the next few months seems likely,” he warned.
A long-running consumer confidence index by GfK showed households in a downbeat and cautious mood about the future and their likely spending levels.
The headline figure stood at -34 on the index, the same as last month and just five points higher than its historic low at the height of the global financial crisis in 2008. The index has run since 1974.
“There is no guarantee that the fall in consumer confidence has ended,” said Joe Staton, client strategy director at GfK.
“Despite households making online purchases of home cooking equipment, freezers, TVs, monitors and other goods, these surges in demand have not compensated for the loss of overall retail sales due to the closure of physical stores.”
“This is retail armageddon,” added Ayush Ansal, chief investment officer at hedge fund Crimson Black Capital.
