Retail sales soared 9.2% last months as shops reopened


May 2021

Retail sales soared 9.2% last months as shops reopened

Retail sales were boosted last month by a surge in spending on clothes as non-essential shops reopened for business.

The Office for National Statistics said that retail sales ticked up by 9.2%, with clothing sales jumping 70% compared with the previous month.

Online sales did dip slightly, however overall sales were up 10% compared to pre-pandemic levels.

Paul Dales, chief UK economist at Capital Economics, described the jump in clothing sales as “astonishing” and said that last month’s data “showed that households were particularly keen to update their wardrobes".

Head of retail at Lloyds Bank, Aled Jones, said: "Fashion retailers [were] the ultimate beneficiaries of beer gardens reopening and the 'rule of six' night out returning."

EY UK & Ireland retail leader, Silvia Rindone, said "significant pent-up consumer demand" had been seen last month.

"With consumers keen to return to the in-store shopping experience and indulge in retail therapy, we saw a sales boost across most categories,” Rindone added.

The British Retail Consortium (BRC) said that last month’s figures were "a welcome boost for thousands of retailers in England and Wales".

Helen Dickinson, BRC chief executive, said: "Improved weather during April meant greater sales of fashion, particularly in outerwear and knitwear, as the public renewed their wardrobe and made plans to meet friends and family outdoors.

However, Dickinson warned that demand "remains fragile" despite the figures being "a step in the right direction".

"Footfall is still down by 40% on the pre-pandemic period, and there are still 530,000 people who work in retail still on furlough," Dickinson said.

Chief UK economist at Pantheon Macroeconomics, Samuel Tombs, said that sales figures could continue to rise throughout May, but he expects spending to “stall as it approaches its pre-Covid level later this year".

Tombs added that the end of the furlough scheme in September was likely to spark a fall in employment, with inflation also keeping real wages down.

Additionally, the end of the stamp duty holiday, also in September, is likely to cause a “sharp decline” in housing market activity, which will in turn lead to less interest in “big-ticket” household items.

Chief business economist at IHS Markit, Chris Williamson, said "The UK is enjoying an unprecedented growth spurt as the economy reopens.

"Factory orders are surging at a record pace as global demand for goods continues to revive, and the service sector is reporting near-record growth as the opening up of the economy allows more businesses to trade."