The end of the lockdown has come too late to prevent new stores from closing on Britain’s main streets as businesses estimate the cost of 18 months of pandemic disruption, the latest update on consumer spending showed.
Despite the boost in activity after the restrictions were lifted, the industry’s trade body, the British Retail Consortium, said the pace of recovery was slowing and more sites in the city center were vacant.
BRC said that the reform of commercial fees was vital to ensure investment in physical retail amid signs of a permanent shift towards online shopping during the Covid-19 crisis.
Its monthly retail sales monitor showed annual sales growth of 6.4% in July, well below the three-month average of 14.7%.
Helen Dickinson, BRC CEO, said: “July continued to post strong sales, although growth has started to slow. The lifting of restrictions did not bring the expected boost in stores, as the humid weather left consumers reluctant to visit shopping destinations. “
Dickinson added that online sales remained strong, with BRC figures showing a digital penetration rate of just under 50% for non-food items, compared to 30% two years ago.
“Many shops and local communities have been hit by the pandemic, and many main streets need more investment,” said the BRC executive director.
“Unfortunately, the current broken merchant fee system continues to hold retailers back, hampering vital investment in retail innovation and the combined physical-digital retail offering. The government must ensure that the upcoming trade rate review permanently reduces the cost burden to sustainable levels.
“Retailers want to play their part in rebuilding a better future for local communities, and the government must give them the tools to do so.”
Separate figures from the credit card company Barclaycard showed that stores may have suffered as consumers spent more money on going to movies, theater and sporting events.
Barclaycard said spending on its cards was 11.6% higher in July than in the same month two years ago as people took advantage of their “newfound freedom.” Entertainment saw its first growth since the pandemic hit the UK in early 2020.
Raheel Ahmed, Director of Consumer Products at Barclaycard, said: “July’s major sporting events and the heat wave kept the nation in good spirits, providing more reasons to celebrate together and giving the entertainment industry its long-awaited boost. back to growth.
“While some industries took a small step back as the post-shutdown ‘honeymoon’ period cooled off, July was a positive month overall. However, given that inflation is expected to rise, it will be interesting to see how this affects consumer spending behavior in the coming months. “
Retail specialists Springboard said the influx of the public on the main streets continued to grow in the first week of August, increasing by 1.4%.