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U.K. Retail Sales Post Biggest Drop on Record Amid Lockdown

U.K. Retail Sales Post Biggest Drop on Record Amid Lockdown

(Bloomberg) -- U.K. retail sales fell the most since records began as restrictions to control the coronavirus forced all but essential stories to close.

Sales including auto fuel declined a record 5.1% in March from February, the biggest drop since at least 1996, the Office for National Statistics said Friday. Sales excluding fuel dropped 3.7%.

U.K. Retail Sales Post Biggest Drop on Record Amid Lockdown

The figures lay bare the unrepresented damage the virus is inflicting on the U.K.’s already struggling retail industry, and worse could still be to come.

By the end of March only supermarkets, pharmacies and other essential stores remained open after Prime Minister Boris Johnson ordered Britons to stay at home, and those shops are not set to re-open until at least May. The retail sales survey covered the period from March 1 to April 4.

Clothing stores saw sales plummet 35%, the worst performer among non-food stores, where sales fell by more than 19% as a whole. Sales of auto fuel registered a decline of almost 19%.

The only hints of good news for the industry came in food sales, which climbed a record 10.4% after being boosted by panic buying in the early part of the month. With the nation now working from home, alcohol stores saw sales surge by 31.4%, the biggest increase since records began in 1988. The figure excludes supermarkets, where the vast majority of alcohol is bought.

Meanwhile, shoppers increasingly turned to the Internet, where the value of sales jumped more than 8% on the month. Online sales as a proportion of all retailing reached a record high 22.3%.

Sales fell 1.6% in the first quarter, the biggest decline since 2010. That will knock almost 0.1 percentage point off gross domestic product. Sales dropped 5.8% in March from a year earlier, the most on record.

In a further worrying sign for U.K. retailers, a separate report Friday showed U.K. consumer confidence held at the lowest in more than a decade.

GfK said its measure of sentiment was at -34 in April, close to the troughs seen during the financial crisis in 2008. Households had become marginally less bleak about the outlook for their personal finances over the coming year, but the index of major purchases remained week.

©2020 Bloomberg L.P.