Retail sales were up by almost 5% in September. Exclude automotive fuel and volumes increased by 6.4% year on year. DIY leads the retail rally. DIY sales were up by 27%, sales of flowers, plants and seeds, increased by 30%.
Working from home is boosting productivity, in households at least. "Don't just sit there do something", the cry. Household good sales were up by 10%, carpet sales were up by 50%. Take a break? Sneak into the bedroom and read a book. Book sales were up by 14%.
Losers in the retail rally were fashion clothing, down 14%. Computers and tele-comm sales were down by 40%. Thinking of music and movies, then stream again, traditional outlet sales were down by 9%.
This week Gap announced the possible closure of outlets in Europe, as part of a world wide review. This month, John Lewis announced a retail shake up which will see the closure of some stores and a focus on on line activity. Online sales are expected to rise to 70% of JLP sales this year. On line sales in Waitrose may increase to 20% of all sales by the end of next year.
Retailers are shrinking retail footprints as online penetration increases. In September, online sales increased by over 50% accounting for 28% of all retail transactions. Online food sales increased by 12%, accounting for just over 10% of all food sales.
Shopping habits have now been transformed by the lock-down, especially in food. Morrisons doubled delivery capacity in the first six months of the year. Tesco, Sainsbury's and Asda followed suit. Capacity is expected to double again within two years. The pressure on logistics is intense. Distribution centres are now the hot property in property.
Will the retail boom continue, as the lock down measures take effect? Consumer confidence slipped this month according to the latest GfK data. Fears of job losses will overhang spending as the furlough scheme ends this month. The Chancellor will be forced to step up his spending plans yet again, to support growth through the Bleak Mid Winter Plan ...
The Saturday Economist
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