Rolling live coverage of business, economics and financial markets as retail sales volumes rise by 0.8% in August
- Economists warn that positive retail picture may worsen in winter
- FTSE 100 posts declines as industrials drag
Could there be a double dip in retail sales? That would certainly be one potential upshot of rising unemployment.
Here is the picture so far for overall sales volumes:
The August retail figures show that the UK retail industry had a stronger summer than might have been expected, but by most accounts it looks much less appealing as winter approaches.
With the government’s test and trace operation suffering from massive demand and new restrictions on millions of Britons – not to mention an expected wave of redundancies ahead – there is a lot standing in the way of further strength for retailers.
August proved a far better month than most retailers expected, with many market towns and retail parks benefitting from increased footfall as consumers holidayed at home and fears around Covid-19 eased for a short while. However, there remains huge uncertainty for shops, particularly those in city centres.
With the autumn/winter season set to be characterised by uncertainty and increased social restrictions, we can expect to see further changes across the sector as businesses look to reshape their models for a ‘Covid Christmas’. Naturally, there is growing anxiety among those who bank on a successful golden quarter given the impact social distancing could have on this year’s festivities.
There is considerable uncertainty as to just how willing and able consumers will be to spend beyond the third quarter. Indeed, persistent consumer caution is seen as a significant risk that could limit the UK recovery.
The fundamentals for consumers have taken a clear downturn as a result of COVID-19, and they are likely to remain under pressure in the near term at least. Many people have already lost their jobs despite the supportive government measures – as was highlighted by employment falling by 695,000 over April-August […] – while others will be concerned that they may still end up losing their job once the furlough scheme ends in October.