Retail Sales Slump In January Amid Lockdown

Retail sales fell sharply last month with many stores closed amid the latest coronavirus lockdown restrictions, official figures have indicated.

Sales sank 8.2% in January from the month before, the Office for National Statistics (ONS) said.

Department and clothing store sales were particularly affected last month, the ONS said.

However, the share of online sales hit a record high and accounted for over a third of total spending.

"The latest national lockdown led to a sharp monthly fall in January's retail sales, with April 2020 the only month on record to see a bigger slump," said the ONS's deputy national statistician for economic statistics, Jonathan Athow.

"However, the decrease seen this time was not as large as that of the first lockdown, as some stores have adapted to the current circumstances, with services such as click-and-collect helping to cushion the fall."

Online spending hit a record proportion of 35.2% of all sales, he added, while sales at food stores were boosted by the lockdown closures of pubs and restaurants.

Feedback from retailers suggested that the closure of the hospitality sector had boosted sales of food and alcohol, the ONS said.

Restrictions to non-essential retailers have hit the non-food sector worst during the coronavirus pandemic.

Sales in the sector plunged 24.4% in January, although this was not as severe the fall seen during the first lockdown in March 2020.

"There are signs that retailers have adapted better to the latest lockdown," said Lisa Hooker, consumer markets leader at accountants PwC.

"While non-grocery stores took the brunt of the pain, with sales volumes declining by a quarter, they were still over 50% higher than in the first lockdown last April."

She added that while the first quarter of the year is traditionally quieter for retailers, "stores will be hoping that a rapid re-opening will allow shoppers to spend the estimated £10,000 that households have saved on average during the lockdowns".

Richard Lim, chief executive of Retail Economics, said he thought the pandemic has "driven a step-change in online shopping".

"A new wave of digital shoppers have broken down the initial barriers of setting up online accounts, entering payment details and overcoming issues of trust," he said.

Consumers now "seamlessly transition" to online sites and apps discovered during previous lockdowns, Mr Lim added.

"It's inevitable that some of these behaviours will become a permanent feature of the industry as consumers embrace a new way to shop and the industry boosts online capacity."