Retailers 'hanging on by a thread' as city centre footfall lags

The chief executive of the British Retail Consortium has urged the Government to act fast to persuade office workers back into city centres, as retailers “continue to be devastated” by low footfall.

Shoppers spent more money online last month, which boosted the overall UK retail sales figures by 4.7 per cent on a like-for-like basis compared to the same month a year earlier.

Helen Dickinson said high levels of home working have continued to drive growth in online sales, but said bricks and mortar stores were continuing to suffer as office workers “stayed away for yet another month”.

She said: “Many retailers are continuing to struggle, particularly those in clothing, footwear and beauty, that are reliant on high footfall locations.

“With rents accumulating, and the September quarter payment date fast approaching, many retailers are hanging on by a thread.

“Unless businesses and government can successfully persuade office workers back into city and town centres, some high street retailers will be unable to afford their fixed costs.

“Government will need to act fast or September will see more shops close and more job losses realised.”

Over the three months to August, in-store sales of non-food items slid by 17.8 per cent, according to the new research.

However, total non-food retail sales increased by 7.7 per cent on a like-for-like basis as they were buoyed by a significant jump in online sales.

Paul Martin, UK head of retail at KPMG, said: "We continue to experience mixed fortunes and not all retailers are where they should be at this point in the year.

"Fashion sales did start to rebound somewhat - at least online - although this was mainly driven by children's back-to-school purchases.

"Likewise, the focus on home-related products, including furniture and computing equipment, continued - no doubt aided by many consumers remaining mostly at home."

Meanwhile, like-for-like food sales increased by 6.3% over the three months to August.

Susan Barratt, chief executive officer of IGD, said: "Following further easing of lockdown restrictions, consumer spending on food continues to return to more usual patterns.

"Grocery sales put in a solid performance compared to August 2019, despite a much cooler summer bank holiday at the end of the month for English and Welsh shoppers.

"The ongoing normalisation of consumer spending has also been helped by the government's Eat Out to Help Out scheme, which gave the out-of-home sector a significant and much-needed boost."