Retail sales continue to recover despite new coronavirus restrictions
The recovery of retail sales continued in October, with shoppers spending more for the fifth successive month.
New data reveals that sales rose 4.9% compared to October 2019 (on a total basis) according to the BRC-KPMG Retail Sales Monitor.
The improvement came despite the introduction of tighter coronavirus restrictions in many parts of the country during the month. These appear to have prompted increased sales of home entertainment equipment and home office equipment as people prepared for a period at home. Sales of clothing and footwear fell back, with the exception of the loungewear market, where consumers appear to have focused on home comforts. In the food sector, sales proved robust, with many households deciding to stock up in preparation for the lockdown.
Despite the recovery, data from the Office for National Statistics underlines the adverse impacts of coronavirus. In the second half of October, only 85% of wholesale and retail businesses were actively trading. 47% said turnover was below what they’d normally expect at this time of year and only 15% said they were ahead of schedule.
Focusing on trade
Retail and wholesale markets continue to look to international markets, both as a source of additional trade and for supply chain diversification.
Our latest Trade Barometer report suggests that the European Union (EU) will remain a key region of focus for the sector. 31% of retailers and wholesalers are targeting opportunities in the EU, along with North America (30%) and China (24%). But businesses are concerned about the operational challenges that stand in the way of doing more international trade. Most notably, post-Brexit regulatory change and other bureaucracy is a concern for 40% of the sector, with 47% citing supply chain disruption.
Nevertheless, retailers and wholesales remain optimistic. Some 58% of companies in the Trade Barometer report expect to grow over the next three years.
How we can help
Our video podcast from the launch of our Trade Barometer is available here. It features a panel of industry experts and business leaders discussing the challenges and opportunities that lie ahead for retailers and wholesalers. Topics covered include:
- capturing growth in new markets
- mitigating operational risk through supply chain diversification
- managing bureaucracy issues when trading internationally.
We’ll continue to look for opportunities to support retailers and wholesalers in international markets. From lifestyle brands, exploring the $350bn US apparel market, to beauty and cosmetics companies hoping to enter growing Asian markets, where regulatory change is set to create new opportunities. The first quarter of 2021 will see us launch an international showcase of global trading partners from the Americas, Asia, Europe and the Middle East to provide support with market entry and help UK firms identify new trading partners. We’ll be delivering this programme virtually, with more details available in the next few weeks.
To discuss how we can help your business please email Sukh Nat on sukhjeeven.nat@santander.co.uk