The end of lockdown has come too late to prevent fresh store closures on Britain’s high streets as businesses count the cost of 18 months of pandemic disruption, the latest update on consumer spending has shown.
Despite a boost to activity after the lifting of restrictions, the trade body for the sector, the British Retail Consortium, said the pace of recovery was slowing and more town centre sites were falling vacant.
The BRC said reform of business rates was vital to ensure investment in bricks-and-mortar retailing 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 down on the three-month average of 14.7%.
Helen Dickinson, the BRC’s chief executive, said: “July continued to see strong sales, although growth has started to slow. The lifting of restrictions did not bring the anticipated in-store boost, with the wet weather leaving consumers reluctant to visit shopping destinations.”
Dickinson added that online sales remained strong, with the BRC figures showing a digital penetration rate of just under 50% for non-food items, up from 30% two years ago.
“Many shops and local communities have been battered by the pandemic, with many high streets in need of further investment,” the BRC chief executive said.
“Unfortunately, the current broken business rates system continues to hold back retailers, hindering vital investment into retail innovation and the blended physical-digital retail offering. The government must ensure the upcoming business rates review permanently reduces the cost burden to sustainable levels.
“Retailers want to play their part in building back a better future for local communities, and government must give them the tools to do so.”
Separate figures from the credit card company Barclaycard showed shops may have suffered from consumers spending more of their money on going to the cinema, theatre 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 experienced its first growth since the pandemic arrived in the UK in early 2020.
Raheel Ahmed, Barclaycard’s head of consumer products, said: “July’s major sports fixtures and the heatwave kept the nation in good spirits, providing more reasons to celebrate together, and giving the entertainment industry its long-awaited boost back into growth.
“While some sectors took a small step back as the post-lockdown ‘honeymoon’ period cooled, July was a positive month overall. However, with inflation expected to rise, it will be interesting to see how this impacts consumer spending behaviour over the coming months.”
The retail specialists Springboard said high street footfall continued to grow in the first week of August, rising by 1.4%.
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