Retail sales, Great Britain: January 2021

• In January 2021, retail sales volumes decreased by 8.2% when compared with December 2020 as tighter nationwide coronavirus (COVID-19) restrictions affected sales.

• Retail sales volumes were 5.5% lower than before the pandemic in February 2020 indicating that the impact of restrictions on the retail sector was not as large as that seen in April 2020 during the first full month of retail restrictions when sales fell by 22.2% when compared with levels before the pandemic.

• All sectors saw a monthly decline in volume sales in January 2021 except for non-store retailers and food stores, who reported growth of 3.7% and 1.4% respectively when compared with December 2020.

• In the three months to January 2021, retail sales volume fell by 4.9% when compared with the previous three months, with strong declines in both clothing stores and automotive fuel.

• The proportion spent online soared to 35.2% in January 2021, the highest on record; this compares with 29.6% in December 2020 and 19.5% reported in January 2020.

• All store types reported an increase in their proportion of online spending in January 2021 when compared with December 2020; with food stores reaching an historic high of 12.2% of sales conducted online.

Table 1 provides a snapshot of what happened in the retail sales industry in January 2021 with both value and volume growth rates.

The value of sales was 7.8% lower, and the quantity bought down 8.2% compared with December 2020. This signalled a steep decline in the sector as it was again affected by coronavirus (COVID-19) restrictions.

Estimates for both the amount spent and the quantity bought were lower in January 2021 than a year ago. The amount spent decreased by 7.2% and the quantity bought decreased by 5.9% compared with the same month a year earlier.

The reporting period for the January publication covers 3 January 2021 to 30 January 2021; during this period there were widespread and extensive restrictions to non-essential retail in England, Scotland and Wales.

Feedback from retailers suggested that these enforced closures affected sales, although not to the same extent as witnessed in April 2020 (the first full month of restrictions on the retail sector) when total retail fell by 22.2% when compared with the February level. Anecdotal evidence suggested that during the current period of restrictions, improved online capability and click and collect purchases helped to lessen the impact with a fall of 5.5% in January 2021 compared with February 2020 levels.

Figure 2 displays the contribution to month-on-month growth in January 2021, with the amount spent 7.8% lower and the quantity bought down 8.2%.

Non-food stores were the largest contributor towards the monthly decrease seen in both the amount spent and quantity bought, at negative 8.7 and negative 8.9 percentage points respectively. Clothing stores were the main driver behind this contribution, with monthly declines of 35.6% in the amount spent and 34.7% in the quantity bought.

However, there were positive contributions from food stores at 0.9 and 0.6 percentage points for the amount spent and quantity bought respectively; with feedback from retailers suggesting that the closure of the hospitality sector had boosted sales of food and alcohol.

Non-store retailing also reported positive contributions of 0.5 and 0.6 percentage points for the amount spent and quantity bought with anecdotal evidence indicating that growth in the sector was aided by high street closures in non-essential retail sectors.

The quantity of sales decreased by 8.2% in January 2021 when compared with December 2020, with the largest contribution to the fall coming from non-food stores with a monthly decrease of 24.4%.

The non-food sector has been 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 19.0% and 41.0% before six consecutive months of growth saw the sector return to the levels of sales observed before the pandemic in September 2020. November 2020 saw the reintroduction of restrictions in several parts of the country leading to a monthly fall of 8.8% before a slight recovery again in December 2020 of 3.8% as restrictions were eased at the beginning of the month. January 2021 has seen a steep decline of 24.4% as nationwide restrictions on non-essential retail were reintroduced. This decline however is not as severe as under the first national lockdown.

While all non-food stores fell in January 2021, the declines in all sectors weren't as severe as in the spring of 2020 when restrictions were first applied to non-essential retail. During each period of tighter restrictions to non-essential retail, the clothing sector has been affected the most severely.

For a better understanding of what products people are buying, we asked 54 of the largest retailers for a breakdown of the main commodities sold. Figure 5 looks at the sale of clothing products as a proportion of all clothing sales within retail as a whole.

Prior to the coronavirus (COVID-19) pandemic over 60% of all clothing was bought within the non-food sector (which includes clothing retailers) but during the first period of retail restrictions this proportion dropped to 33.2% and 32.4% in April and May 2020 respectively. During the period of restrictions the total level of clothing goods sales dropped significantly but both supermarkets and non-store retailers reported increases to the level of their sales of clothing products during the closure of high street stores.

During this period the sale of clothing increased in both food stores (which includes supermarkets) and non-store retailers with the proportion of sales reaching 22.6% and 45.0% in May 2020 for both sectors respectively. This increase saw the proportion of clothing sold in non-store retail exceed that of traditional clothing stores for the first time. As restrictions were lifted, the sale of clothing products quickly returned to historical patterns. However, during subsequent retail closures the switch by consumers to non-store and food sectors was repeated; during January 2021 again more clothing products were sold in non-store retail, 44.2% compared with non-food retailing with 32.4%.

Looking at information gathered from retailers in both the Retail Sales Inquiry and the fortnightly Business Impact of Coronavirus (COVID-19) Survey (BICS), the BICS asked of those businesses continuing to trade, in the last two weeks, how has the coronavirus (COVID-19) pandemic affected your business's turnover, compared with what is normally expected for this time of year?

Within non-food stores, department stores reported the largest percentage of companies who stated their turnover had decreased, followed by clothing retailers and household goods stores. Household goods stores were the sector to report the largest percentage of retailers who had witnessed an increase in their turnover during the reference period.

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

The monthly picture in January 2021 was one of growth, with total online sales increasing by 9.2% when compared with December 2020. Other non-food stores recorded the largest monthly growth of 31.1% while household goods and food stores also saw significant monthly increases of 22.6% and 11.5% respectively. Department stores were the only sector to see a decline on the month of negative 9.1%.

The proportion of online retail increased to a record level in January 2021 reaching 35.2% up from 29.6% in December 2020 and was far higher than the 19.5% in January 2020, reflecting the impact the pandemic has had on consumer behaviours. Food stores also reported a record proportion of online sales this month of 12.2% with anecdotal feedback from retailers suggesting that click and collect food orders had boosted online sales.

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 3 January 2021 to 30 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 January 2021 have been reviewed. Many series are impacted by coronavirus (COVID-19) related actions in January 2021 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.

Comparability with international data

The most recent international estimate of retail sales available for January 2021 was published by the United States Census Bureau on 17 February 2021. In its advanced monthly sales for retail and food services, January 2021 (PDF, 320KB) 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, 498KB)  across the European Union on 4 February 2021 for December 2020. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU27 when compared with November 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 Office for National Statistics (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 later this year.