Online sales drop as shoppers head back to the high street

By Linda Howard

Now that lockdown restrictions have been fully lifted there has been a significant shift from online shopping back to the high street, according to new data.

The British Retail Consortium (BRC) and KPMG monthly sales monitor found that non-food online sales dropped 4.6% in August, with 38.3% of sales now online compared to 42% during the same month a year earlier.

Total retail sales managed to continue rising in August and were up 3% compared to a month earlier, but the speed of growth has slowed significantly with experts suggesting the demand for online goods during the various Covid-19 lockdowns and restrictions is coming to an end.

The 3% rise in sales last month was driven by formalwear, the BRC said, with workers returning to offices and the wedding season in full swing.

Commenting on the report findings, Helen Dickinson, BRC chief executive, said: "As post-lockdown pent-up demand has softened, the growth in retail sales we have seen over the past few months slowed for August.

"Nonetheless, we still saw growth above pre-pandemic levels, as people returned to stores in greater numbers.

"With wedding season in full swing and workers gradually returning to the office, formalwear was a strong performer.

"Additionally, the Bank Holiday weekend and back-to-school buzz contributed to a rise in non-food sales.

"While the online sales growth has begun to slow, it is still high when compared with pre-pandemic growth rates."

Don Williams, retail partner at KPMG, said: "With the retail recovery showing signs of slowing, the sector is expected to grow at a more muted rate as retailers face increasing challenges on a number of fronts.

"Inflation is expected to accelerate putting pressure on household spending, whilst retailers battle for share of wallet as consumers spend money on leisure, entertainment and travel."

The signs that consumers are spending more on other activities was highlighted in the latest Barclaycard data.

The card company said spending rose 15.4% in August compared with the same period in 2019, before the coronavirus pandemic.

All leisure sectors, apart from international travel, grew including restaurants, which rose for the first time in more than 17 months.

The BRC added that food sales continue to increase, up 2.9% in August compared with a year ago.

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