Retail sales, Great Britain: September 2020

• In September 2020 retail sales volumes increased by 1.5% when compared with August; this is the fifth consecutive month of growth, resulting in an increase of 5.5% when compared with February's pre-pandemic level.

• While food sales have done well in recent months as people have eaten out less, non-food store sales have now made a recovery at 1.7% above their February levels.

• In the three months to September, retail sales volumes increased by 17.4% when compared with the previous three months; this is the biggest quarterly increase on record as sales picked up from record-low levels experienced earlier in the year.

• In September, fuel sales volumes were still 8.6% below February with reduced travel as many continued to work from home, and clothing sales volumes were still 12.7% below February.

• Home improvement sales continued to do well in September with increased sales in household goods and garden items within "other" non-food stores.

• The proportion of online sales was at 27.5%, compared with 20.1% reported in February, despite small monthly declines across most of the retail sector.

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

In September, we saw growth across all measures. The value of retail sales increased by 1.4% and volume sales by 1.5% when compared with the previous month. When compared with February 2020’s pre-pandemic level, total retail sales were 3.9% and 5.5% higher in value and volume terms respectively.

A strong rate of growth is seen in the three-month on three-month growth rate at 17.7% and 17.4% for value and volume sales respectively. This is the biggest quarterly growth seen on record as sales recovered from the low levels experienced earlier in the year. In Quarter 2 (Apr to June), the volume of retail sales fell by 9.7%.

In September 2020, retail sales volumes increased by 1.5% from August. This was the fifth consecutive month of growth in the industry from May to September 2020, resulting in an increase of 5.5% in volume sales when compared with the pre-pandemic levels in February 2020.

Looking at the four main retail sectors, food stores and non-store retailing remained at higher levels than in February. Non-food stores also recovered in September, while fuel was the only sector to remain at lower levels than in February 2020 (Figure 2).

Figure 2: Food and non-store retailing were at higher levels than in February, while fuel still remained lower than February 2020

Volume sales, seasonally adjusted, Great Britain, September 2017 to September 2020

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When compared with February, volume sales within food stores were 3.7% higher in September. Food retailers had suggested that the peak in March 2020 was because of panic buying at the start of the pandemic, and despite seeing a notable fall in sales following this peak, spending remained high. This may be a result of the government tightening restrictions for other services such as bars and restaurants at the end of September, which may have encouraged spending in food stores.

In September, volume sales within non-store retailing were 36.6% higher than in February. Despite some contraction from the sharp rate of increase in this sector, consumers were still carrying out much of their shopping online when compared with February.

Fuel was the only main sector to remain below February's pre-pandemic level with volume sales 8.6% lower in September when compared with February 2020. As lockdown eased, we saw an increase in travel and the quantity of fuel bought. However, as many people remained working at home and with certain restrictions still in place, fuel sales were yet to fully recover. Average road fuel sales reported by the Department for Business, Energy and Industrial Strategy (BEIS) stated that average sales in the week ending 20 September 2020 were at 92% of a typical week before lockdown. Car traffic data in the Coronavirus and the latest indicators for the UK economy and society: 1 October 2020 release also showed that on Monday 28 September, car traffic was 11 percentage points lower than the equivalent Monday in the first week of February.

Volume sales in non-food stores recovered from the falls experienced over lockdown at 1.7% higher in September when compared with February.

Many stores within non-food stores were classified as non-essential retailers and were negatively affected by the pandemic because of many temporary store closures within the sector.

In September, the total non-food sector made a recovery and volume sales were 1.7% above February’s pre-pandemic levels. Figure 3 looks at this recovery within non-food stores.

Figure 3: Household goods stores and other non-food stores increased to above February levels within total non-food stores

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

Notes:

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

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As can be seen in Figure 3, not all stores contributed to the recovery in the non-food stores sector. In September, clothing sales were 12.7% lower than in February in volume terms, while department stores were 0.9% lower.

Volume sales in household goods stores and “other” non-food stores increased to 11.0% and 10.7% above February, respectively. Feedback from household goods stores had informed us that home improvement sales from DIY and electrical goods stores did well in recent months and helped with the recovery of sales (Figure 4).

Figure 4: Home improvement store sales were at higher levels than their February sales, while music and video store sales continued to recover

Volume sales, seasonally adjusted, Great Britain, September 2017 to September 2020

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Further information from Wave 14 of the Business Impact of Coronavirus (COVID-19) Survey (BICS) further supported an increase in turnover within household goods stores in the two weeks from 7 to 20 September 2020 (Figure 5).

The highest percentage of businesses reporting increased turnover over the two-week period from 7 to 20 September was household goods stores at 52.4%. Only 14.3% of businesses reported a decrease in turnover in this sector.

In comparison, a higher percentage of textile, clothing and footwear businesses reported decreased turnover at 65.4%.

In September, volume sales in the retail industry recovered to 5.5% above February’s pre-pandemic levels. Looking at the four main sectors, all sectors except fuel provided positive contributions to this growth (Figure 6).

Fuel was the only main sector to provide a negative contribution to growth when compared with February, at negative 0.9 percentage points.

Non-store retailing made the strongest positive contribution to growth at 4.2 percentage points, followed by food stores at 1.4 percentage points.

Non-food stores also provided a positive contribution when compared with February’s pre-pandemic levels at 0.7 percentage points.

Non-food stores were negatively affected in February because of many stores in this sector being classed as non-essential. However, in September, many stores recovered from the sharp falls experienced over lockdown, particularly in “other non-food stores”, which contributed 1.4 percentage points to the overall growth in the industry (Figure 7).

Figure 7 shows that “other non-food stores”, which includes a range of store types, provided positive contributions to growth. The largest contribution to the positive growth when compared with February was “other retail sales of new goods” at 0.8 percentage points. While there was growth across many stores in this sector, the main driver for the positive contribution came from optical sales. We gained feedback from opticians in this sector, suggesting that pent-up demand for eye tests and optical wear increased their sales when lockdown measures had eased.

Flowers, plants and seeds stores provided strong positive contributions at 0.5 percentage points, followed by dispensing chemists at 0.4 percentage points. Many retailers selling gardening products commented on increased demand during lockdown as consumers socially distanced in their gardens where possible. Comments from dispensing chemist retailers informed us that sales of personal protective equipment (PPE) and coronavirus-related products over lockdown helped increase turnover.

Table 3 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 September, we saw strong growth in value sales across all sectors when compared with the same month a year earlier. This is because of online sales reaching higher than usual levels over the course of the pandemic.

Department stores were the only stores to increase sales in September when compared with August at 6.0%. Feedback from these stores stated that the online pre-ordering of a new range of gaming products helped boost their sales.

Despite monthly declines across all sectors except department stores, the proportion of online sales was at 27.5%, compared with the 20.1% reported in February. The proportion of online sales increased across all sectors with food stores nearly doubling their online proportions from 5.4% in February to 10.4% 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 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 30 August to 3 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 RSI QMI.

Seasonal adjustment

All seasonal adjustment parameters for our volume and value data, for all businesses and internet 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.

After EU withdrawal

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.

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-making and policymaking.

To align with Blue Book national accounts, the RSI 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 to international data

The most recent international estimate of retail sales available for September 2020 was published by the US Census Bureau on 16 October 2020. In its advanced monthly sales for retail and food services, September 2020 (PDF, 249KB), 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, 516KB) across the EU on 5 October 2020 for August 2020. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with July 2020.