UK July Retail Sales Fall Sharply But Remain Higher Than Pre-Pandemic Levels

U.K. retail sales, buoyed by high grocery store spending during the European Championship matches in June, dropped unexpectedly in July, The Guardian reported Friday (Aug 20).

According to Great Britain’s Office for National Statistics, there was a spike in high street and food sales during the football European Championship in June, but in July retail sales dropped sharply by 2.5 percent, as spending across supermarkets and among high street retailers plummeted.

This is likely due to the ease of COVID-19 restrictions across the U.K., following which consumers have turned to dining out and socializing, preferring pubs, cafes and restaurants over grocery spending in supermarkets.

The government’s retail results show that almost every category saw a decrease in sales, including at petrol stations and non-food stores, where sales dipped by 2.9 percent and 4.4 percent, respectively.

The decreased spending on fuel at petrol stations was due to heavy rainfall in early July, while consumers spent more on computers and telecoms at the expense of clothes or shopping in secondhand stores.

Despite these unexpected drops, U.K. retail sales still exceed pre-pandemic levels by almost 6 percent, buoyed by online sales which jumped to 27.9 percent in July, higher than the 19.8 percent level recorded before the first COVID lockdown in February 2020.

Read more: UK Merchants Reckon With Post-Pandemic Contactless Retail Reality

As expected, the share of online cross-channel shoppers in the U.K. grew by 14 percent since the pandemic’s onset, while the share of brick-and-mortar shoppers declined by 11 percent.

These figures were gathered from the PYMNTS/Cybersource Global Digital Shopping Index U.K. Edition released in January of this year, and also showed that close to half of U.K. consumers chose to start their shopping trips online, with 63 percent of this group preferring to have their goods delivered home.

The PYMNTS report is an indication that the contactless retail reality is here to stay, a challenge U.K. merchants will have to address seriously in coming months to keep sales afloat, while tailoring the retail experience to suit both online and in-store shoppers alike.