Retail sales, Great Britain: May 2020

• Retail sales volumes partly rebounded in May 2020 with an increase of 12.0% when compared with the record falls experienced in the previous month, but sales were still down by 13.1% on February before the impact of the coronavirus (COVID-19) pandemic.

• Non-food stores provided the largest positive contribution to the monthly growth in May 2020, aided by a strong increase of 42.0% in household goods stores, with the opening of hardware, paints and glass stores reflected in this sector.

• The proportion spent online soared to the highest proportion on record in May 2020 at 33.4%, which compares with the 30.8% reported in April 2020.

• While there was a strong increase in the volume of fuel sales in May 2020, levels still remain 42.5% lower than February 2020, before government travel restrictions were in place.

• In the three months to May 2020, the volume of retail sales decreased by a record 12.8%, with declines across all stores except food and non-store retailing.

• The Office for National Statistics (ONS) has released a public statement on the coronavirus (COVID-19) and the production of statistics.

When compared with the same month a year earlier, value sales fell by 14.2% and volume sales by 13.1%; and in the three months to May, value sales fell by 13.9% and volume sales by 13.3%.

In May 2020, all measures except for the monthly growth rate showed strong declines for both value and volume retail sales.

In the three months to May 2020, value of sales fell by 14.1% and volume of sales by 12.8% when compared with the previous three months; the biggest decline on record.

In contrast, the monthly growth rate increased by 11.8% in value terms and 12.0% in volume; an uplift from the record low levels experienced in the previous month.

Figure 1 looks at the volume of retail sales over time to better understand what is happening in the retail industry.

Figure 1 shows the quantity bought in retail sales over time for both the rolling three-month on three-month and the month-on-month movement.

There has been a significant fall in the overall volume of sales in the retail industry since March 2020 as many stores paused trade from 23 March following official government guidance during the coronavirus (COVID-19) pandemic. This has resulted in a fall of 12.8% in the three months to May 2020; the lowest levels since records began in 1996.

While we see some partial bounce back on the monthly growth rate in May 2020 at 12.0%, levels of sales do not recover from the strong falls seen in March and April 2020 and are still down by 13.1% on February 2020 before the impact of the coronavirus pandemic.

The monthly growth rate in May 2020 is strong because of a combination of recent increasingly rapid growth in non-store retailing and a pick-up for non-food stores from the lowest levels ever experienced (Figure 2).

The weight for non-store retailing was 18.1% to total retail.

Figure 2 shows the volume of retail sales for the four main store types from May 2010 to May 2020.

Over this period, the fastest rate of growth is seen in non-store retailing with a continued increase in online sales. This became even more apparent from March 2020 with a boom in online sales during the coronavirus pandemic. In May 2020, non-store retailing sales volumes increased by 24.3% in the most recent three months and by 21.0% when compared with April 2020; the highest growth rates for non-store retailing on record for both measures.

However, when we take into account the weighting to total retail, the increased sales in non-food stores were the largest contribution to growth with more money spent in this sector (Figure 3).

Food stores showed a slight decline in volume sales at negative 0.3% in May 2020, but levels remain high from the spike in sales in March 2020, partly caused by panic buying during the pandemic as reported by retailers.

In May 2020, non-food stores saw an uplift of 23.7% following the record fall of 41.7% in April 2020. While some garden centres and hardware stores were able to start trading again from mid-May, many others, such as clothing stores, moved to online. The growth in May, along with the weight to retail sales, meant that non-food stores provided the largest contribution to growth in May (Figure 3).

Changes to weights

Weights to total retail are calculated from the amount of money typically spent in each retail sector and used as a proportion to calculate growth contributions. For example, around 38.1 pence of every pound is typically spent in food stores, providing us with a weight of 38.1 to total retail. In May 2020, these proportions were recalculated to reflect the changes in spending during the pandemic. The amount of money spent in food stores increased to 51.4%, but food stores still provided a negative contribution in volume terms of 0.2 percentage points.

Despite the continued growth in non-store retailing and a slight increase in the weight to total retail from 11.4% to 18.1%, this sector contributed just 3.8 percentage points to the overall volume growth of 12.0%.

Non-food stores made the largest positive contribution for both value and volume sales at 6.1 and 5.9 percentage points respectively because of a weight of approximately 25.0% to total retail in May 2020 (reduced from 40.1%).

Fuel sales

Fuel sales usually has a weight of just over 10.4% to total retail, but was at around 5.5% in May 2020, resulting in a positive contribution of 2.3 and 2.7 percentage points for value and volume sales respectively.

In May 2020, the growth in fuel sales partly recovered from the sharp decline seen in April. According to the Department for Business, Energy and Industrial Strategy, fuel sales have gradually increased since mid-April. We have seen that as travel restrictions began to ease in May, volume fuel sales increased by 49.1% when compared with April, but this was still down by 42.5% when compared with February, before government travel restrictions were in place.

Fuel prices also continued to fall in May 2020 (Figure 4).

As government restrictions limited travel in March, the average store price, as measured by the implied price deflator, continued a downward trend with a fall of 4.4% in May, the fourth consecutive monthly decline in fuel prices. When compared with the same month a year earlier, fuel prices fell by 14.9%. As mentioned in the latest Consumer Price Inflation release, fuel was one of the main reasons for the downward contribution to the Consumer Prices Index including owner occupiers’ housing costs (CPIH) rate in May.

With falling fuel prices, the value of fuel sales increased by 42.4% and volume sales at a slightly faster rate at 49.1%, but still remain at low levels following the sharp fall in sales in March and April 2020.

In May 2020, the volume of sales in non-food stores increased by a record 23.7% when compared with the sharp fall of 41.7% in April 2020. Monthly increases in volume sales were seen across all store types in this sector (Figure 5).

In May 2020, all non-food store sales increased from the low levels experienced in April 2020 with the temporary closure of many non-essential stores during the pandemic. Feedback from retailers informed us that some stores were able to trade again following the ease of the “lockdown” on 13 May in England, while some moved to online.

Department stores were the least affected by the store closures in March and April since some of the stores in this sector sell a significant amount of essential goods, including an element of food. This meant that department stores remained at higher levels and saw an increase of 13.8% in May 2020. They have now returned to similar levels seen in 2014, mainly because of increased store sales in May.

Household goods stores saw the biggest increase in volume sales in May 2020 at 42.0% when compared with April. Music and video recordings were the only store type in this sector to show a fall in volume sales, while furniture, electrical household appliances, and hardware, paints and glass stores all increased in their volume of sales. According to retailers in this sector, consumers appeared to be carrying out home improvements while spending more time than usual in their homes. For hardware, paints and glass stores, the increase of 67.4% in May 2020 brought volume sales back to the usual level (Figure 6).

As many stores paused trading in April 2020, we saw a sharp fall in volume sales in hardware, paints and glass stores. In May 2020, sales levels returned to normal as many stores re-opened from mid-May.

For many stores, the ability to trade online helped to increase sales in May 2020 (Figure 7).

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 with an online service, whether their online sales of goods and or services changed in the last two weeks.

Figure 7 shows that 87.1% of businesses reported to have continued to trade online, while 5.2% had stopped online sales with the remainder unsure. Broken down by the effect on online sales, 32.8% reported an increase compared with 23.3% reporting a decrease to their online sales.

The Retail Sales Inquiry estimates, which are based on a much larger sample survey, similarly reported an overall increase in the proportion of online trading at a record 33.4% in May 2020 (Table 2).

Table 2 shows the month-on-month growth rates for the amount spent online, in addition to the proportion of online sales for April and May 2020. The percentage weights indicate where money is spent online.

Online sales as a proportion of all retailing reached a record high of 33.4% in May 2020, exceeding the original record reported last month of 30.7%.

There was a larger uptake of online spending for food, which reached record proportions, from 9.3% in April to 11.3% in May.

Clothing and other non-food stores both also increased their proportion of online retailing in May to record levels. Feedback from a number of these stores reported to have opened their online sites in May after a pause in trading in April.

Figure 8 shows that while clothing stores saw a decline in online trading in April 2020 because of many stores pausing trade, a number of stores began to trade online in May 2020, with a monthly increase of 25.2%.

Other stores also saw more of an online uptake in May 2020, with the sharpest monthly increase at 38.3%.

Department stores were the only stores to show a decline in May 2020, when compared with April 2020, at negative 3.8%. With a slight ease of the “lockdown” restrictions, store sales increased in this sector with less online purchasing.

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 May 2020 to 30 May 2020.

In May 2020 we have updated our Annual Industry Weights to ensure the most up-to-date data are used to calculate our volume series. We review weights to maintain quality estimates with minimal revisions.

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.

This year, with another full year’s data, we will be undertaking our annual update of our commodity deflators to improve our estimates of volumes sold.

As part of our quality reviews, we will be updating our industry weights in the near future, which will incorporate the most up-to-date data.

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 May 2020 was published by the US Census Bureau on 16 June 2020. In its advanced monthly sales for retail and food services, May 2020 (PDF, 244KB) 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 4 June 2020 for April 2020. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU27 when compared with March 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.