Shops 'struggling to survive' despite stronger sales in July

The Government has been urged to show its support for retailers, which the Consortium said are “hanging on by a thread” in the face of rising costs and lower sales, by introducing bounceback grants for those in need.

Analysis of sales showed sales increased by 3.2 per cent in the four weeks from July 5 to August 1, the second consecutive month of growth since the start of the pandemic.

Like-for-like sales, which include online sales, were also up 4.3 per cent on July last year, when temporarily closed stores were excluded.

In the three months to July, in-store sales of non-food items dropped by more than 29 per cent, but food sales increased by 8.2 per cent - the biggest increase since June 2009.

Online sales “remain buoyant” - with non-food online sales increasing by 41 per cent in July.

The British Retail Consortium’s chief executive Helen Dickinson said the growth came as lockdown eased and demand “gradually began to return” in some places.

While the strongest performance was seen in food, furniture and homeware, many shops, particularly in fashion, jewellery and beauty, “are still struggling to survive”.

She said: “Many shops continued to struggle as footfall was down, with many people still reluctant to go out, and fewer impulse purchases.

“While the rise in retail sales is a step in the right direction, the industry is still trying to catch up lost ground, with most shops having suffered months of closures.

“The fragile economic situation continues to bear down on consumer confidence, with some retailers hanging by only a thread in the face of rising costs and lower sales.”

She said that while rents continue to accumulate, many “otherwise viable” businesses could fall into insolvency.

“The Government should adopt the proposal from landlords and tenants for a Property Bounceback Grant, which would deliver £7 billion in tax revenue to the Exchequer and save 375,000 jobs,” she added.

UK Head of Retail at KPMG, Paul Martin, said September will be “the real test for retailers”, traditionally being a month of high volumes driven by the return to school after the holiday season.

“That said, with the furlough scheme unwinding and wider economic uncertainty set for the autumn, consumer anxiety will likely rise along with it,” he said. “This will place more scrutiny on disposable income and make life even tougher for retailers.”

A Government spokesperson said it recognised the “huge challenges” faced by commercial tenants and landlords and was working to ensure they are supported.

He said: “The Government has taken unprecedented action to protect jobs and livelihoods, with a package of around £160 billion of support, including loans, rates relief and grants for businesses to support them through the pandemic.”