Worst decline in retail sales on record putting hundreds of thousands of high street jobs at risk
HUNDREDS of thousands of retail workers risk losing their jobs as the UK high street experiences the worst decline in sales in 25 years.
Sales decreased by 4.3 per cent in March, according to the latest figures from the British Retail Consortium (BRC) - the worst drop since records began in 1995.
The BRC warned that the fall in income for retailers could result in thousands of people losing work as brands begin to cut budgets.
Helen Dickinson, chief executive of the BRC, said: “The crisis continues; the retail industry is at the epicentre and the tremors will be felt for a long while yet.
“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 are at risk within these companies and their supply chains.”
Chancellor Rishi Sunak warned this week that the UK faced “unprecedented times” with an “unprecedented economic response”.
The latest figures produced by the Office for Budget Responsibility predict the worst GDP slump in a single quarter since records began in 1908.
Unemployment could rocket to 3.4 million and the deficit may spiral to £218billion this year.
Research released yesterday found that half of retailers face administration by the end of the summer if the lockdown goes on for six months.
In brief: March retail sales
Here's how different parts of the retail sector performed in March
- Retail sales were down 4.3 per cent in March, compared to 1.8 per cent in the same month last year - the biggest decline since records began in 1995.
- In the first three weeks of March (before lockdown), retail sales grew 12 per cent, but declined 27 per cent in the next two weeks.
- Over the three months to the end of March, sales made in stores for non-food items fell 13 per cent.
- Over the same three months, food sales increased 5.1 per cent, higher than the 12-month average growth of 2.4 per cent.
- But online, non-food sales increased by 18.8 per cent in March.
The effect of the UK-wide coronavirus lockdown has had a dramatic impact on shopping across the nation.
Prime minister Boris Johnson ordered all “non-essential” retailers to close on March 23.
Before the lockdown came into force, retail sales were growing 12 per cent, but they dropped 27 per cent in the last two weeks of March, the BRC figures showed.
Over the three months from the start of the year until the end of March, in-store sales of non-food items fell 13 per cent.
But sales for food increased 5.1 per cent as shoppers rushed to stock their cupboards.
And online sales - even of non-essential items - also grew.
Sales of non-food items made over the internet jumped 18.8 per cent in March.
Retailers which could disappear from the high street
THESE retailers have all revealed problems in the last few weeks
- Brighthouse fell into administration at the end of March
- Cath Kidston has been put up for sale to save it from collapse, and administrators are also set to be appointed
- Debenhams entered administration earlier this month so it can continue trading but will close 39 stores
- Laura Ashley announced it was going into administration last month
- Oasis and Warehouse announced they were on the edge of administration earlier this week and have now appointed administrators
- Shoe shop Office has been put up for sale
Ms Dickinson said the sales figures masked “even more dramatic swings”.
And she warned that supermarkets could face lower sales in weeks to come, while still spending huge sums of money on protective measures, donating to food banks and hiring tens of thousands of temporary staff.
“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,” she said.
Sales of computers and accessories, board games, and fitness equipment all rose sharply as more people home-schooled their kids and worked from home.
But demand for the latest fashion ranges significantly declined, the BRC found.
It also warned that sales data could get worse, as shops face their first complete month under lockdown.
Grocery research company IGD also said that shoppers are less confident about their finance than they were earlier in the year.
Almost 40 per cent of people surveyed in March expected to be worse off in the year ahead, up from 27 per cent saying the same thing in February.
More on Money
A number of retailers have collapsed or come close to failure in recent weeks, including Debenhams - here's which of its stores are closing.
Meanwhile, the parent company of Office has proposed a sale of the business.
And Oasis and Warehouse are close to going into administration.