(Bloomberg) -- Tentative signs of recovery in the U.K. retail sector are giving little cause for optimism to the beleaguered high street.
Total retail sales rose in June, the first year-on-year increase since lockdown began, according to the British Retail Consortium. That was largely driven by online shopping. Data compiled by Barclaycard, which processes nearly half of U.K. credit and debit card transactions, showed the decline in consumer spending easing.
Still, Internet grocery shopping more than doubled as over half of half of consumers surveyed by the card provider said they are continuing to avoid the shops. Spending on non-essential items remains 22% lower than a year earlier, despite strong gains in home improvement, sports and outdoor outlets as restrictions eased.
“Retailers won’t be picking up where they left off and months of reduced or no sales will threaten the survival of many,” said Paul Martin, U.K. head of retail at KPMG, which compiled the BRC data. “The pandemic has significantly changed consumer behavior, it’s therefore vital that routes to market and ways of working are adapted.”
Britain’s struggling retail industry has been hard hit by a pandemic that forced many stores to shutter for months and gave a boost to online stores. Even after they were allowed to reopen, fewer customer visits, higher costs of running stores safely and lower demand are eating away at profits. Among the casualties, big name chains Boots and John Lewis last week said they plan to slash more than 5,000 jobs.
©2020 Bloomberg L.P.
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