British retail sales rebound above pre-pandemic levels

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British economy
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British retail sales in July rebounded above pre-pandemic levels in February as lockdown measures eased significantly, the country’s Office for National Statistics (ONS) said Friday.

In July, the value and volume of retail sales increased by 4.4 percent and 3.6 percent respectively from the previous month, it said.

Compared with pre-pandemic levels in February, total retail sales in July were 1.7 percent and 3.0 percent higher in value and volume respectively, it added.

The national statistics body said although total retail sales recovered in July, the wider economy still entered a technical recession in the second quarter.

“As we see unprecedented changes to the economy, the pandemic has also changed the shape of the retail industry,” the ONS said.

Despite total levels of sales reaching slightly above pre-pandemic levels, “not all retail sectors experienced this bounce back,” it noted.

Fuel sales continued to recover in July, but were still 11.7 percent lower than in February.

Meanwhile, “clothing store sales were the worst hit during the pandemic”, said the ONS, with sales volume in July remaining 25.7 percent lower than in February.

In addition, online retail sales saw a strong growth despite a slight monthly decline in July, it said, falling by 7.0 percent in July compared with June, but still 50.4 percent higher than February’s level.

“Unsurprisingly, online sales have been the major ‘winner’ from lockdown,” said James Smith, a developed markets economist at financial services firm ING.

Thomas Pugh, an economist at London-based economic analysis firm Capital Economics, said that retail sales recovered as non-essential shops were allowed to open for the whole month, “but the sector has benefited disproportionately from online spending and a switch away from other types of spending.”

“Other parts of the economy won’t have recovered as quickly and retail sales growth will probably slow even further in the coming months,” Pugh added.

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