Retail recovery is a strange kind of V
June’s retail sales figures from the Office for National Statistics tell us some important things about how consumers are reacting to the Coronavirus crisis and its aftermath.
First, they are willing to spend money, for now at least. Overall retail sales were up 1.5% on the same month last year. And that despite the fact that the measured month covered a significant period of time (15 out of 35 days) when “non-essential stores” were still closed. Whether that willingness to spend will continue as many people lose their jobs in the next few months is very much in doubt.
Secondly, the shift to online rather than face-to-face spending is, if anything, intensifying with growth accelerating from 48.2% in May to 53.8% last month. This is a pointer towards a more permanent change than many had anticipated at the start of the Covid-19 crisis.
Thirdly, food remains a winner, as more people cook and eat at home, as do electricals and DIY, confirming the shift of domestic comforts and home improvement. Furniture is the odd exception, perhaps due to lack of home moves or the desire to avoid some types of big ticket purchases involving both physical store visits and delivery staff entering the home.
Finally, with people still not socialising much, going to bars, pubs, restaurants or indeed travelling, the need to dress to impress has virtually disappeared. Clothing and footwear remains the big casualty of the crisis in retail and until virus-related worries are firmly behind us, it is unlikely to seem anything like the ‘V’ enjoyed by the sector overall. For fashion at least, the ‘V’ shaped recovery is looking much more like an ‘L’ or at best a reverse ‘J’.