U.K. Retail Sales Post Partial Rebound After Lockdown Plunge
(Bloomberg) -- U.K. retail sales posted a modest rebound in February after a brutal start to the year, when a lockdown to contain the coronavirus forced non-essential stores to close.
The volume of goods sold in shops and online rose 2.1% from January, the Office for National Statistics said Friday, in line with economists’ expectations. Sales excluding auto fuel climbed 2.4%.
The pickup still leaves retailers facing a sharp downturn this quarter after a third national lockdown sent sales plummeting by 8.2% in January. While businesses and consumers are adapting better to restrictions than when curbs were first imposed last spring, the economy as a whole is likely to shrink by more than 3% during the period.
Prime Minister Boris Johnson is hoping to allow non-essential stores to reopen on April 12. With half of adults vaccinated against Covid-19, the government has set out plans to soften restrictions.
Policy makers at the Treasury and Bank of England hope consumers will splurge some of the savings they built up in the absence of opportunities to spend. The central bank’s Chief Economist Andy Haldane said this week that a “rip-roaring recovery” is possible even if just a small amount of an estimated 150 billion pounds ($206 billion) of excess cash is spent.
Business last month was driven by sales of household goods and spending at department stores, both up more than 16%, as consumers snapped up outdoor equipment in preparation for an easing of restrictions and used the lockdown to undertake home improvements. Food sales also rose.
The increase at department stores came mainly from budget operators that were able to keep their physical stores open because of selling a mix of food and other essential items, the ONS said.
However, clothing stores continued to struggle with sales down more than half on their pre-pandemic level. The share of online sales increased to a record high, reaching 36.1% of total sales.
Total sales in February were still almost 4% below their level a year earlier, before the pandemic struck, and a gloomier-than-expected survey from the Confederation of British Industry on Thursday hinted at another lackluster performance in March.
©2021 Bloomberg L.P.