DTC - 2020 Retail Sales Report for Offline Stores
In December 2020, retail sales volumes increased by 0.3% when compared with November 2020, resulting in an increase of 2.7% when compared with February's pre-lockdown level.
Clothing stores reported strong monthly growth of 21.5%, rebounding from a large fall in November 2020 when stores were closed because of coronavirus (COVID-19) restrictions.
The year-on-year growth rate in the volume of retail sales increased by 2.9% when compared with December 2019; non-store retailers reported the largest year-on-year growth at 43.5% while food stores also saw strong annual growth of 4.4%.
In 2020 as a whole, estimates of the quantity bought decreased by 1.9% when compared with 2019, the largest year-on-year fall on record.
Clothing stores (negative 25.1%), fuel stores (negative 22.2%), "other stores" (negative 11.6%) and department stores (negative 5.2%) all recorded record annual declines in sales volumes in 2020 when compared with 2019, non-store retailing, however, saw a record annual increase of 32.0% for 2020.
Total online retailing values increased by 46.1% in 2020 when compared with 2019, the highest annual growth reported since 2008.
Food stores (79.3%), "other stores" (73.9%), household goods stores (73.4%) and department stores (65.9%) all recorded record annual increases in values of internet sales in 2020 when compared with 2019.
2.Retail sales in December
Table 1 provides a snapshot of what is happening in the retail sales industry in December 2020 with both value and volume growth rates.
The monthly growth rate for value sales was 0.4%, and 0.3% for the quantity bought. The monthly growth rates signalled a recovery in the sector following declines in November when retail was again affected by coronavirus (COVID-19) restrictions.
In December 2020, estimates for both the amount spent and the quantity bought increased when compared with the same month a year earlier. The amount spent increased by 1.3% and the quantity bought increased by 2.9%.
Figure 1: In December 2020, retail sales volumes increased by 0.3% following a 4.1% fall in November
The reporting period for the December publication covers 29 November 2020 to 2 January 2021; this followed a period in November when there were more widespread and extensive restrictions to non-essential retail. During December, there was initially a period of eased restrictions early in the month, however, there followed a number of tighter restrictions to non-essential retail in England, Scotland and Wales later in the month.
Feedback from retailers suggested that these enforced closures later in the month affected turnover, though not to the same extent as witnessed in November, however, Christmas purchases through click and collect and online sales helped to lessen the impact.
Clothing retailers saw the largest monthly growth in December 2020 of 21.5%, rebounding from the monthly fall of 19.6% reported in November where the sector was affected by widespread store closures. Food stores reported a monthly fall of 3.4% in December, which can be partly be attributed to a fall back from the 2.8% growth in November. In November, supermarkets benefitted from the closure of the hospitality industries and other non-essential retail sectors in some parts of the country.
3.Month-on-month contributions to growth by sector
Figure 2: Contributions to month-on-month growth in the quantity bought and amount spent in the four main retail sectors
Figure 2 displays the contribution to month-on-month growth in December 2020, with the amount spent at 0.4% and the quantity bought at 0.3%.
Non-food stores were the largest contributor towards the monthly increase seen in both the amount spent and quantity bought, at 1.6 and 1.4 percentage points respectively. Clothing stores were the main driver behind this contribution, with monthly growth of 23.7% in the amount spent and 21.5% in the quantity bought.
However, these contributions were offset by falls of the same magnitude from food stores, at negative 1.6 and 1.4 percentage points for the amount spent and quantity bought respectively. Anecdotal evidence from retailers suggested that low footfall and restrictions on the sale of non-essential items had impacted turnover during the reporting period.
Non-store retailing contributed positively to the monthly growth in amount spent and quantity bought, at 0.2 and 0.3 percentage points respectively, despite lower monthly growth in December 2020 than reported in both October and November when there was extensive promotional activity in the sector.
4.A closer look at clothing stores
The quantity bought in retail sales increased by 0.3% in December 2020 when compared with November 2020, with the largest monthly increase of 21.5% occurring in the clothing sector. This is a bounce back from the 19.6% fall in November 2020.
Figure 3: The quantity bought in clothing stores increased by 21.5% in December 2020 following a fall of 19.6% in November
The clothing sector has been one of the worst affected by the restrictions to non-essential retail during the coronavirus (COVID-19) pandemic period. Sales declined rapidly in March and April 2020, with consecutive monthly falls of 35.7% and 49.3% before the first signs of a recovery began in May with a monthly growth of 17.5%.
There then followed four months of continuous growth before a small decline of 1.2% in October 2020, however, November saw the re-introduction of non-essential retail closures, which impacted the sector again with a monthly fall of 19.6%.
There was further recovery in December 2020 as restrictions were eased and stores re-opened with monthly growth of 21.5%. Feedback from retailers suggested increased Christmas sales in the first half of December before more restrictions were imposed. At this point retailers stated that sales through online portals increased, which lessened the impact.
Despite the monthly recovery, sales in the sector are still 14.2% lower than December 2019 and continue to remain at a lower level than before the pandemic struck.
5.Annual fall in total retail sales
In 2020, the quantity bought in retail sales decreased by 1.9%, the largest annual fall since records began in 1997.
Figure 4: Total retail sales volumes fell by 1.9% in 2020 when compared with 2019
After experiencing declines at the beginning of the decade of 1.0% and 0.3% in 2010 and 2011 respectively, the trend in the quantity bought in total retail sales has been one of consistent growth with a peak at 4.7% year-on-year growth in 2016 and continued growth up to 2019, which was up 3.3% on the previous year.
Because of the impact of the coronavirus (COVID-19) pandemic, 2020 has seen the retail sector suffer its largest annual fall since records began of 1.9%, with continued restrictions on non-essential retail impacting the sector as a whole.
Figure 5: Clothing stores reported the largest annual fall in 2020 of 25.1% while non-store (predominately online) recorded its largest annual increase of 32.0%
Clothing stores reported the largest annual fall in 2020 at negative 25.1%, which was also the largest year-on-year fall on record for the sector. The sector was heavily affected by the retail restrictions, with feedback from retailers suggesting that the inability to try clothes on in physical stores and the restrictions to hospitality meaning consumers socialised less, also impacted sales.
Fuel retailers also suffered a record year-on-year fall in sales, down 22.2%, with travel restrictions and work from home guidelines significantly reducing the demand for fuel throughout the pandemic period.
Department stores and "Other" stores, which includes jewellers, cosmetics and toys amongst other sectors, also reported record year-on-year falls in the quantity sold in 2020, down 5.2% and 11.6% respectively.
Food stores, however, were able to buck the trend and reported annual growth of 4.3%, the highest yearly growth since 2001. Anecdotal evidence from retailers suggested that click and collect and online services had boosted sales as did the ability to remain open while other sectors were closed because of their classification as non-essential retailers.
Non-store retailers reported a record annual growth in 2020 of 32.0%. Feedback from retailers stated that the closure of large sectors of physical retail allowed for online portals to fill consumer demand throughout the pandemic period.