Retail sales, Great Britain: October 2020

• In October 2020, retail sales volumes increased by 1.2% when compared with September; the sixth consecutive month of growth in the industry.

• In October, growth in the volume of sales for non-store retailing at 6.4%, household goods stores at 3.2% and department stores at 3.1% all contributed to the overall monthly increase in retail sales.

• In October, the year-on-year growth rate in the volume of retail sales saw a strong increase of 5.8%, with feedback from a range of businesses suggesting that consumers had started Christmas shopping earlier this year, further helped by early discounting from a range of stores.

• Looking at October’s total retail sales values (excluding fuel), which is a comparable measure to our online series, sales increased by 7.9% when compared with February; driven by a strong increase in sales online at 52.8% in comparison to reduced store sales at negative 3.3%.

Table 1 provides a snapshot of what is happening in the retail sales industry in October 2020 with both value and volume growth rates.

All measures in the total retail sales industry saw an increase in October 2020. The monthly growth rate for value sales was 1.4% and for volume sales 1.2%. This was the sixth consecutive month of growth resulting in value and volume sales 5.2% and 6.7% higher respectively than in February 2020, before coronavirus (COVID-19) lockdown restrictions were applied in the UK.

In the three months to October, value sales increased by 9.2% and volume sales by 8.9% when compared with the previous three months.

In October, retail sales volumes continued to increase for the sixth consecutive month, with a monthly growth rate of 1.2%.

We see sharp falls in sales at the start of the lockdown in March and April 2020, followed by strong growth to recovery in May and June 2020. A slower rate of growth is seen in the latest three months, with volume sales in October 2020 now 6.7% higher than February’s pre-lockdown levels.

Figure 2: Clothing stores and fuel remained below their pre-lockdown level in October 2020, while non-store retailing showed a further uptake in sales

Volume sales, seasonally adjusted, Great Britain, February 2020 to October 2020

Notes:

1. Chart shows the March to October sales as a proportion of February 2020 where February sales equals 100%.

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Figure 2 shows the volume of sales for each retail sector from February 2020’s pre-coronavirus (COVID-19) lockdown level. Non-store retailing has showed strength over the course of the pandemic and remained at high levels. In October 2020, volume sales within non-store retailing were 44.9% higher than February.

Most sectors recovered to a higher level than February and feedback from various retailers informed us that consumers appeared to be shopping earlier for Christmas this year, which has helped boost sales.

Clothing stores and fuel were the only sectors still below their pre-lockdown sales.

Clothing

Clothing stores were largely effected by the restrictions in place for non-essential stores during lockdown measures and was adversely effected as a result. Figure 9 in this latest indicators release also shows the impact of reduced footfall due to local lockdown restrictions in October. We talk more about footfall in section 4 of this release.

Fuel

Fuel sales are yet to recover because of reduced car road traffic (Figure 3).

Figure 3 shows the volume of fuel sales against car road traffic sales data used in the latest indicators for the UK release. Using the car road traffic in Figure 11 of this release, we created an average index for the same period as the retail sales questionnaire.

We can see that retail fuel sales are yet to make a full recovery from the falls experienced in March and April 2020 because of a reduction in car road traffic during the lockdown period and again in October 2020. As initial lockdown measures eased, fuel sales began to rise along with increased car traffic but as traffic levelled out and began to reduce in recent months, fuel sales failed to fully recover. In October, fuel sales still remained 8.8% below February’s pre-lockdown level, while car road traffic reduced by an average 14.2%.

Looking at the businesses common between the Retail Sales Inquiry and the Business Impact of Coronavirus (COVID-19) Survey (BICS) during the two weeks from 5 October to 18 October 2020, Figure 4 shows that businesses within all retail sectors experienced some reduced footfall. We can see in Figure 5 that the strong growth in online sales is the driver for the overall growth in the retail industry.

Figure 4 shows no increased footfall for fuel, clothing or department store businesses. Clothing stores and department store businesses reported the highest percentages of decreased footfall at 78.9% and 66.7% respectively.

A reduction in footfall across stores may have resulted in a shift from store spending to shopping online (Figure 5).

In Figure 5 we look at value store sales alongside online value sales. We have excluded fuel and non-store retailing since retail fuel sales are not included online and non-store retailing will not include store sales.

In October 2020, total retail sales values (excluding fuel) increased by 7.9% when compared with February 2020, driven by a strong increase for sales online at 52.8% in comparison with a decline in store sales at negative 3.3%.

In October, we can see that online sales for all sectors increased when compared with February. Online food sales nearly doubled, with an increase of 99.2% in comparison with food store sales, which saw a fall of 2.1%. Overall, total food sales increased by 3.4% when compared with February.

Clothing stores, with an overall decline of 14.0% in value sales, increased their online sales by 17.1% but saw the biggest fall in store sales at negative 22.1%.

Table 2 shows the month-on-month and year-on-year growth rates for the amount spent online, in addition to the proportion of online sales. The percentage weights indicate where money is spent online.

In October 2020, we saw strong growth in value sales across all sectors when compared with the same month a year earlier. Online food sales increased by 99.2%, department stores by 87.2% and other non-food stores by 89.7% when compared with the previous year. This is because of online sales reaching higher than usual levels over the course of the pandemic. All sectors saw an increase in online sales on the month with some retailers taking advantage of promotional activity to encourage more spending.

The proportion of online sales increased to 28.5% compared with the 27.6% reported in September.

Value (amount spent)

The value estimates reflect the total turnover that businesses have collected over a standard period.

Volume (quantity bought)

The volume estimates are calculated by taking the value estimates and adjusting to remove the impact of price changes.

Seasonally adjusted

Seasonally adjusted estimates are derived by estimating and removing calendar effects (for example Easter moving between March and April) and seasonal effects (for example increased spending in December as a result of Christmas) from the non-seasonally adjusted (NSA) estimates.

Non-seasonally adjusted

Non-seasonally adjusted estimates refer to raw data where the effects of regular or seasonal patterns have not been removed.

Non-store retailing

Non-store retailing refers to retailers that do not have a store presence. While the majority is made up of online retailers, it also includes other retailers such as stalls and markets.

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the four-week period 4 October 2020 to 31 October 2020.

Unless otherwise stated, the estimates in this release are seasonally adjusted.

Retail sales collects turnover data from retailers, which is money through the till before any deductions, including refunded items. This provides us with the best indicator for consumer spending during the reference period.

The Retail Sales Index (RSI) measures the value and volume of retail sales in Great Britain on a monthly basis. Data are collected from 5,000 businesses in the retail industry, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving an online questionnaire every month. The survey’s results are used to produce seasonally adjusted monthly, quarterly and annual estimates of output in the retail industry at current price and at chained volume measures (removing the effect of price changes).

Quality

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Retail Sales QMI.

Seasonal adjustment

All seasonal adjustment parameters for our volume and value data, for all businesses and internet data time series, up to July 2020 have been reviewed. Many series are impacted by coronavirus (COVID-19) related actions in July 2020 and previous months. Each series has been reviewed and the best adjustment for coronavirus related effects applied. These may need to be revised further as additional data become available.

Uses and users

The Retail Sales Index (RSI) is an important economic indicator and one of the earliest short-term measures of economic activity. It is used in the compilation of the national accounts and widely used by private and public sector institutions, particularly by the Bank of England and HM Treasury to assist in informed decision- and policy-making.

To align with UK National Accounts, the Blue Book, the Retail Sales Index will re-reference to the year 2018. This will provide a more recent index reference year for analysis but will not impact growth rates or general movements in the data.

Comparability with international data

The most recent international estimate of retail sales available for October 2020 was published by the US Census Bureau on 17 November 2020. In its advanced monthly sales for retail and food services, October 2020 (PDF, 706KB) they include the amount spent in the US retail industry, including motor vehicles and parts, and food services.

Data for Northern Ireland are published by the Northern Ireland Statistics and Research Agency (NISRA).

It should be noted that accurate comparisons cannot be made against these or other international statistics for a variety of reasons, including differences in methodology.

Eurostat also published their latest estimates of the Volume of retail trade (PDF, 510KB) across the European Union on 5 November 2020 for September 2020. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU27 when compared with August 2020.

As the UK leaves the EU, it is important that our statistics continue to be of high quality and are internationally comparable. During the transition period, those UK statistics that align with EU practice and rules will continue to do so in the same way as before 31 January 2020.

After the transition period, we will continue to produce our national accounts statistics in line with the UK Statistics Authority’s Code of Practice for Statistics and in accordance with internationally agreed statistical guidance and standards.

The Withdrawal Agreement outlines a need for UK gross national income (a fundamental component of the national accounts, which includes gross domestic product (GDP)) statistics to remain in line with those of other EU countries until the EU budgets are finalised for the years in which we were a member. To ensure comparability during this cycle, the national accounts will continue to be produced according to European System of Accounts (ESA) 2010 definitions and standards.