Retail sales continued to decline in February though online sales more than doubled to a record high as purchases of homeware goods grew for the tenth consecutive month, according to new figures.
The BDO retail sales tracker found that overall like-for-like retail sales dropped by 3.1 per cent last month, a lower drop than recorded in January when they fell by 10 per cent, but still the second-worst performance since August.
Continued coronavirus lockdown restrictions caused in-store trade to plummet by about four-fifths, but enforced shops closures helped digital sales climb by 167.3 per cent compared to a 6 per cent growth in the same month in 2020.
Digital sales climbed by 167.3 per cent in February as non-essential shops remained closed
Homeware products sold extremely well during February, rising by 32.2 per cent despite in-store sales slumping by over half, with the highest increase during the third week of the month.
By contrast, fashion goods’ sales jumped in the second and third weeks of February, but fell off in the two weeks either side of them and ended 3.6 per cent down. Lifestyle purchases did even worse though, with comparable sales falling 15.6 per cent overall.
However, BDO cheered a ‘few positive signs’ for the battered sector, with Prime Minister Boris Johnson announcing plans for non-essential shops to reopen from April 12 in his roadmap out of lockdown.
The organisation said that despite weak consumer confidence, the expected loosening of restrictions should boost online sales during the latter part of lockdown.
But the economic outlook will be uncertain, ‘as consumers begin to plot their emergence from hibernation, and caution will be necessary as the economy begins to reopen,’ the group stated.
It added: ‘The need for limited restrictions could remain, prolonging the need for relief for those hardest hit by the pandemic. Fundamentally, as sentiment begins to improve, it will be important to remember that a sustained recovery will need broad foundations.’
Total fashion sales fell in February despite jumped in the second and third weeks of the month
BDO also said the retail sector welcomed this week’s Budget measures, including further business rates relief, the extension of the furlough scheme to the end of September, and restart grants and loans.
Hospitality and leisure firms, which have been among the worst affected by Covid-19, can get grants of up to £18,000 for reopening, while non-essential retail companies will be allowed grants up to a maximum of £6,000 for every premise.
Meanwhile, the 100 per cent business rates holiday has been extended until the end of June, followed by a two-thirds discount up to a maximum value of £2million for the other nine months of the current financial year.
Chancellor Rishi Sunak (pictured) announced in the budget on Wednesday that hospitality and leisure businesses will be able to get restart grants of up to £18,000
But it urged an overhaul in the business rates system to create ‘a more equitable system that can help safeguard the future of the high street.’
Mike Ashley’s Frasers Group and Superdry founder Julian Dunkerton have additionally expressed profound criticism of Chancellor Rishi Sunak’s reforms covering the rates system.
Frasers Group – who owns Sports Direct – called the government’s new £2million cap on business rates relief ‘near worthless’ for major firms while Dunkerton said the measures would ‘stop me investing in the high street.’
Rishi Sunak gives Downing Street briefing after unveiling Budget