UK retail sales grew at their fastest rate since records began in the second quarter, driven by loosening lockdown restrictions, Euro 2020 football championships and the release of pent-up demand, industry data showed.
From April to June, retail sales increased 10.4 per cent compared with the same period in 2019, the fastest pace since 1995, according to the British Retail Consortium in association with the consultancy KPMG.
The uptick, led by a 13 per cent rise in retail sales in June compared with the same month before the pandemic, has mitigated concerns over a loss of economic momentum as Covid-19 infections have risen across the country.
Helen Dickinson, chief executive of the British Retail Consortium, said “exceptional growth” in the second quarter resulted from the release of consumer demand built up over previous lockdowns.
“Fashion and footwear did well while the sun was out in the first half of June . . . the start of Euro 2020 provided a boost for TVs, snack food and beer,” she added.
However, the Office for National Statistics reported that economic output grew much less than expected in May. High frequency data, such as restaurant bookings, visits to shops and restaurants, showed a decline in June from their peak following the reopening of indoor hospitality in most of the country on May 17.
Moreover, despite the BRC reporting strong retail growth in May compared with pre-pandemic levels, official data from the ONS showed sales falling back from the previous month, casting doubt over the strength of the sector’s recovery.
Nonetheless, the BRC figures pointed to strong appetite from shoppers despite the spread of the Delta variant first identified in India. Experts noted that the strength of the spending recovery would depend on how secure shoppers feel after Covid-19 restrictions were removed in most of the country on July 19.
Paul Martin, UK head of retail at KPMG, said retailers faced the challenge of “convincing consumers that it’s safe to shop in store as restrictions around mask wearing and social distancing come to an end”.
He urged the government to “reassure the public on safety, while pushing forward with its hugely successful vaccination programme”.
Barclaycard reported an 11 per cent growth in consumer spending in June compared with the same month in 2019, highlighting a strong rebound in the sector.
“Brits flocked back to pubs, bars and beer gardens to watch the football and tennis on the big screens, as the heatwave early in the month encouraged many of us to get out in the sunshine and socialise,” said Raheel Ahmed, head of consumer products at Barclays UK.
People spent more in pubs and bars since September last year, while supermarket and specialist food and drink spending grew strongly, according to Barclaycard, which tracks nearly half of all UK credit and debit card transactions.
Meanwhile, hotels, resorts and accommodation reported their highest levels of business since before the pandemic offering “glimmers of hope” for the UK travel industry.
However, with the “traffic light system” restrictions continuing to limit foreign holidays, spending on travel agents and airlines was down by over 70 per cent.