COVID cases climbed across the country but UK retail sales remained strong in September. This improvement is, however, likely to be short-lived following the announcement of a further lockdown for November. Retailers should, arguably, be better prepared than they were back in March, but this is a huge blow at what is a critical period for the retail sector.
September saw sales soar and continued the trends of recent months
Total retail sales grew for the fourth consecutive month in September, reporting strong year-on-year value and volume growth of 6.0% and 6.4% respectively.
At the subsector level it was the usual winners boosting value and volume growth with Food up by 3.7% and 3.6% respectively, household goods 10.1 and 10.4% and a huge increase for non-store retail of 32.2% and 33.1%.
Department stores and Fashion continue to struggle with major household names such as John Lewis announcing store closures in the wake of a continuous decrease in footfall. UK footfall decreased by 34.5% on last year in September impacted by increasing local restrictions.
Online sales stole the show yet again with growth of 53% on last year, a trend that is only going to increase further in coming months as lockdown restrictions tighten over the winter period.
Unemployment rises despite the Chancellor’s latest support measures
The unemployment rate has continued to increase on previous months across the nation despite Government’s incentives to businesses to retain employees where possible. Unemployment increased by a further 0.2% from 4.1% to 4.3% in the three months to August 2020. Despite the current Job Retention Scheme was set to end on 31 October and it is clear that employers are now starting to make redundancies. Whilst there are additional supports in place for the latest lockdown, it is almost inevitable that a further increase in the unemployment rate will arise in the coming months.
Property prices at an all-time high ahead of more economically uncertain times
The UK property market remains buoyant as the average price of UK property reached an all-time high of £227,826 in October. People continue to assess their options and housing requirements in a post-COVID-19 world. Whilst there are no new restrictions on the housing market at this stage, the high levels of activity seen recently continue to conflict with general economic trends and may change in the coming months as a result of lower overall confidence and increasing concerns as to the economic outlook. A weaker labour market and increased political uncertainty as the Brexit transition period comes to an end in January 2021 are both likely to have an impact on the property market in the longer term.
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