Ryan Kemp, director of retail at TransUnion in the UK, comments on the latest Retail Sales Index from the Office for National Statistics: “Today’s ONS retail sales data has given us reason for cautious optimism as overall volumes rebounded slightly in May, up 12% compared to the record falls in April. However, the impact of COVID-19 is still very much being felt, with figures 13.1% down on pre-pandemic volumes in February. This is largely due to the enforced closures of most stores, with high streets up and down the country having seen only a fraction of their usual footfall.
“These past couple of months have been some of the toughest the retail sector has ever had to endure, with thousands of jobs lost as even leading-name chains are forced to restructure. Even with the reopening of the high street this week, we’re unlikely to see a dramatic change in the immediate future, given the impact of the pandemic on consumer finances. According to our recent research, of those who have been negatively financially impacted, seven in 10* are struggling to pay bills, so it’s no surprise that only essential items are seen as a priority purchase.
“Social distancing has fundamentally changed the retail sector and consumer attitudes to shopping. Online shopping has been adopted out of necessity, even by the digitally-reluctant, leading to a boom – with the proportion spent online hitting a record high of 33.4% in May. This rise in online spending presents a huge opportunity for cybercriminals, however, so retailers and consumers alike must be vigilant and take all steps possible to prevent fraud.
“The biggest driver of growth behind this month’s rebound has been non-food stores, fuelled by a 42% increase in household goods stores, as hardware and DIY stores were allowed to reopen. As consumers are spending more time than ever in the home, these retailers have seen the benefit.
“As we look to how the retail industry may start to recover, the government has called on people to spend and stimulate economic growth. The success of this strategy will be dependent on a number of factors but there’s an enormous task here for retailers who must adapt, not only to the additional health and safety measures, such as limited numbers in-store, the two-metre distancing rule and closed changing rooms – but also to the shift in consumer habits. With online shopping now the norm, attracting customers back for what may seem a limited in-store experience is no easy task. They will need to be flexible and resilient as we continue to navigate these unprecedented challenges.”
* Based on a survey of 1,023 UK adults conducted 28 – 29 May as part of TransUnion’s Financial Hardship Study