Retail sales, Great Britain: December 2020

• In December 2020, retail sales volumes increased by 0.3% when compared with November 2020, resulting in an increase of 2.7% when compared with February's pre-lockdown level.

• Clothing stores reported strong monthly growth of 21.5%, rebounding from a large fall in November 2020 when stores were closed because of coronavirus  (COVID-19) restrictions.

• The year-on-year growth rate in the volume of retail sales increased by 2.9% when compared with December 2019; non-store retailers reported the largest year-on-year growth at 43.5% while food stores also saw strong annual growth of 4.4%.

• In 2020 as a whole, estimates of the quantity bought decreased by 1.9% when compared with 2019, the largest year-on-year fall on record.

• Clothing stores (negative 25.1%), fuel stores (negative 22.2%), "other stores" (negative 11.6%) and department stores (negative 5.2%) all recorded record annual declines in sales volumes in 2020 when compared with 2019, non-store retailing, however, saw a record annual increase of 32.0% for 2020.

• Total online retailing values increased by 46.1% in 2020 when compared with 2019, the highest annual growth reported since 2008.

• Food stores (79.3%), "other stores" (73.9%), household goods stores (73.4%) and department stores (65.9%) all recorded record annual increases in values of internet sales in 2020 when compared with 2019.

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

The monthly growth rate for value sales was 0.4%, and 0.3% for the quantity bought. The monthly growth rates signalled a recovery in the sector following declines in November when retail was again affected by coronavirus (COVID-19) restrictions.

In December 2020, estimates for both the amount spent and the quantity bought increased when compared with the same month a year earlier. The amount spent increased by 1.3% and the quantity bought increased by 2.9%.

The reporting period for the December publication covers 29 November 2020 to 2 January 2021; this followed a period in November when there were more widespread and extensive restrictions to non-essential retail. During December, there was initially a period of eased restrictions early in the month, however, there followed a number of tighter restrictions to non-essential retail in England, Scotland and Wales later in the month.

Feedback from retailers suggested that these enforced closures later in the month affected turnover, though not to the same extent as witnessed in November, however, Christmas purchases through click and collect and online sales helped to lessen the impact.

Clothing retailers saw the largest monthly growth in December 2020 of 21.5%, rebounding from the monthly fall of 19.6% reported in November where the sector was affected by widespread store closures. Food stores reported a monthly fall of 3.4% in December, which can be partly be attributed to a fall back from the 2.8% growth in November. In November, supermarkets benefitted from the closure of the hospitality industries and other non-essential retail sectors in some parts of the country.

Figure 2 displays the contribution to month-on-month growth in December 2020, with the amount spent at 0.4% and the quantity bought at 0.3%.

Non-food stores were the largest contributor towards the monthly increase seen in both the amount spent and quantity bought, at 1.6 and 1.4 percentage points respectively. Clothing stores were the main driver behind this contribution, with monthly growth of 23.7% in the amount spent and 21.5% in the quantity bought.

However, these contributions were offset by falls of the same magnitude from food stores, at negative 1.6 and 1.4 percentage points for the amount spent and quantity bought respectively. Anecdotal evidence from retailers suggested that low footfall and restrictions on the sale of non-essential items had impacted turnover during the reporting period.

Non-store retailing contributed positively to the monthly growth in amount spent and quantity bought, at 0.2 and 0.3 percentage points respectively, despite lower monthly growth in December 2020 than reported in both October and November when there was extensive promotional activity in the sector.

The quantity bought in retail sales increased by 0.3% in December 2020 when compared with November 2020, with the largest monthly increase of 21.5% occurring in the clothing sector. This is a bounce back from the 19.6% fall in November 2020.

The clothing sector has been one of the worst affected by the restrictions to non-essential retail during the coronavirus (COVID-19) pandemic period. Sales declined rapidly in March and April 2020, with consecutive monthly falls of 35.7% and 49.3% before the first signs of a recovery began in May with a monthly growth of 17.5%.

There then followed four months of continuous growth before a small decline of 1.2% in October 2020, however, November saw the re-introduction of non-essential retail closures, which impacted the sector again with a monthly fall of 19.6%.

There was further recovery in December 2020 as restrictions were eased and stores re-opened with monthly growth of 21.5%. Feedback from retailers suggested increased Christmas sales in the first half of December before more restrictions were imposed. At this point retailers stated that sales through online portals increased, which lessened the impact.

Despite the monthly recovery, sales in the sector are still 14.2% lower than December 2019 and continue to remain at a lower level than before the pandemic struck.

In 2020, the quantity bought in retail sales decreased by 1.9%, the largest annual fall since records began in 1997.

After experiencing declines at the beginning of the decade of 1.0% and 0.3% in 2010 and 2011 respectively, the trend in the quantity bought in total retail sales has been one of consistent growth with a peak at 4.7% year-on-year growth in 2016 and continued growth up to 2019, which was up 3.3% on the previous year.

Because of the impact of the coronavirus (COVID-19) pandemic, 2020 has seen the retail sector suffer its largest annual fall since records began of 1.9%, with continued restrictions on non-essential retail impacting the sector as a whole.

Clothing stores reported the largest annual fall in 2020 at negative 25.1%, which was also the largest year-on-year fall on record for the sector. The sector was heavily affected by the retail restrictions, with feedback from retailers suggesting that the inability to try clothes on in physical stores and the restrictions to hospitality meaning consumers socialised less, also impacted sales.

Fuel retailers also suffered a record year-on-year fall in sales, down 22.2%, with travel restrictions and work from home guidelines significantly reducing the demand for fuel throughout the pandemic period.

Department stores and "Other" stores, which includes jewellers, cosmetics and toys amongst other sectors, also reported record year-on-year falls in the quantity sold in 2020, down 5.2% and 11.6% respectively.

Food stores, however, were able to buck the trend and reported annual growth of 4.3%, the highest yearly growth since 2001. Anecdotal evidence from retailers suggested that click and collect and online services had boosted sales as did the ability to remain open while other sectors were closed because of their classification as non-essential retailers.

Non-store retailers reported a record annual growth in 2020 of 32.0%. Feedback from retailers stated that the closure of large sectors of physical retail allowed for online portals to fill consumer demand throughout the pandemic period. Further analysis of this change in consumer behaviour is examined in this blog.

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.

The monthly picture in December 2020 was one of declines, with total online sales falling by 6.2% when compared with November 2020. Household goods stores recorded the largest monthly fall of 27.9% but there were declines across all online sectors, with anecdotal evidence that the re-opening of physical stores in December following restrictions in November saw consumers spending in store again.

Food stores were the only sector to report a monthly increase in online sales in December at 2.6% with retailers citing an uptake in click and collect over the festive period.

In December 2020, there was strong growth in value sales across all sectors when compared with the same month a year earlier. Total online sales increased by 61.4% when comparing with the same month a year earlier. Online food store sales in particular recorded a record year-on-year rise of 126.4% with feedback from retailers suggesting a significant increase in click and collect orders over the Christmas period.

In 2020, the amount spent in online retail sales increased by 46.1% when compared with 2019 as a whole, the largest annual increase since 2008.

All sectors of retail reported large increases in total online sales in 2020. Food stores reported the largest increase in online sales of 79.3% for the year, a record annual increase for the sector. Retailers’ feedback suggested a change in consumer habits caused by the coronavirus (COVID-19) pandemic, with a sustained and significant move to click and collect orders.

Department stores, household goods stores and “other” stores also recorded record annual increases in sales for 2020 as a whole, at 65.9%, 73.9% and 73.4% respectively when compared with 2019. Anecdotal evidence from each of the sectors suggested this was again a consequence of physical store closures forcing consumers to shop online for their items during 2020.

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 five-week period 29 November 2020 to 2 January 2021. 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 Blue Book UK National Accounts, 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 December 2020 was published by the United States Census Bureau on 15 January 2021. In its advanced monthly sales for retail and food services, December 2020 (PDF, 275KB) they include the amount spent in the United States 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, 537KB)across the European Union on 7 January 2021 for November 2020. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU27 when compared with October 2020.

End of EU exit transition period

As the transition period ends and the UK enters into a new Trade and Co-operation Agreement with the EU, the UK statistical system will continue to produce and publish our wide range of economic and social statistics and analysis. We are committed to continued alignment with the highest international statistical standards, enabling comparability both over time and internationally, and ensuring the general public, statistical users and decision-makers have the data they need to be informed.

As the shape of the UK's future statistical relationship with the EU becomes clearer over the coming period, the ONS is making preparations to assume responsibilities that, as part of our membership of the EU and during the transition period, were delegated to the statistical office of the EU, Eurostat. This includes responsibilities relating to international comparability of economic statistics, deciding what international statistical guidance to apply in the UK context and to provide further scrutiny of our statistics and sector classification decisions.

In applying international statistical standards and best practice to UK economic statistics, we will draw on the technical advice of experts in the UK and internationally, and our work will be underpinned by the UK's well-established and robust framework for independent official statistics, set out in the Statistics and Registration Service Act 2007. Further information on our proposals will be made available early this year.