Retail sales suffer worst decline in 2020 since records began

Retail sales suffered their biggest ever year-on-year fall in 2020 as the Covid-19 pandemic took its toll, according to figures released on Friday by the Office for National Statistics.

Sales declined 1.9% last year compared with 2019. Clothing retailers in particular fared badly, with a record annual fall of more than 25%, while restrictions on movement led to a record year-on-year decline for fuel sales.

Lockdowns and restrictions boosted online sales, however, which surged 46.1% on the year in 2020 - the highest annual growth reported since 2008.

ONS deputy national statistician for Economic Statistics, Jonathan Athow, said: "Some sectors were able to buck the trend in 2020. The increased popularity of click and collect and people buying more items from home led to a strong year for overall internet sales, with record highs for food and household goods sales online."

In December, sales rose 0.3% on the month, which was an improvement on the 4.1% drop seen in November but undershot expectations for a 1.2% jump. This left sales up 2.7% compared with February's pre-lockdown level.

Clothing sales pushed up 21.5% in December, recovering from a 19.6% slump the month before when non-essential retailers were closed due to lockdown restrictions. Non-essential retailers were allowed to open again in early December, albeit not for long.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The recovery in retail sales fell flat in December as Covid-19 spread rapidly and forced the government to close non-essential retailers in vast swathes of the country as the month wore on.

"In the end, volumes were 2.7% below October 2020’s peak. Besides petrol, clothing remained the worst performing segment, with sales volumes still 15.9% below their pre-Covid February 2020 level, despite leaping by 21.5% month-to-month.

"By contrast, food store sales exceeded their February 2020 level by 3.0%, despite a 3.4% month-to-month decline, while non-store sales were 45.2% above their pre-Covid level, following a further 1.7% month-to-month increase."

Capital Economics said: "The tiny rise in retail sales in December shows that it wasn’t a very merry Christmas for retailers. And January’s lockdown means it won’t have been a happy start to the new year either. But at least retailers are more immune to lockdowns than many other consumer-facing businesses."