MNI REALITY CHECK: UK Jun Sales May Miss F'cast Despite Reopen

--Industry leaders suggest sales may disappoint best expectations

By Laurie Laird

     LONDON (MNI) - UK retail sales will likely see another strong

month-on-month bounce in June but could still miss upbeat City expectations,

according to industry leaders, as a flurry of activity following the re-opening

of non-essential shops proved to be ephemeral.

     City economists forecast an 8.3% gain between May and June, extending the

record-high 12.0% surge seen in May. However, many at the coal face of retailing

warned that television images of queuing shoppers on 15 June were not

representative of trading over the full month.

     Key points from their comments:

     **Footfall was no better than 40% of normal levels, with shopping districts

from London's Oxford Street to Birmingham's Bullring, eerily quiet even after

June 15th.

     **Clothing and footwear sales -- which comprise 11.4% of the retail basket

-- are showing scant signs of recovery. Demand for occasion ware, historically a

key June driver, fell off a cliff.

     **Internet sales continue to skyrocket on an annual basis, rising by 34% in

June, according to an internet retailing group, extending the 19.7% increase in

May. Multi-channel retailers, those maintaining a physical shopfront as well as

internet operations, report growth concentrated in online transactions.

     ANDY MULCAHY, STRATEGY DIRECTOR AT IMRG "Footfall is massively down and has

not recovered [despite the reopening of shops]. In a retail sense, demand is

staying online."

     RAIN NEWTON SMITH, CHIEF ECONOMIST AT THE CBI "With high street shops

reopening and scenes of long queues, you'd be forgiven for thinking retailers'

difficulties are coming to an end. But the health of the retail sector remains

in the balance.

     FRASER MCKEVITT, KANTAR: "Sales growth accelerated to 18.9% ... the boost

has been led by online sales. Despite the jump, grocers are still navigating a

steady drop in the amount of food and drink bought on the go."

     SUSAN BARRAT, CHIEF EXECUTIVE AT IGD "The continued warm weather and

further easing of lockdown restrictions contributed to another month of high

growth in sales for food and grocery retail ... However, with more retail and

out-of-home outlets now up and running, the sector will find more competition

for spending from July.

     HELEN DICKINSON, CHIEF EXECUTIVE AT THE BRITISH RETAIL CONSORTIUM: "June

finally saw a return to growth in total sales, primarily driven by online as a

result of lockdown measures being eased and pent up demand being released.

Despite footfall still being well below pre-coronavirus levels, average spend

was up as consumers made the most of their occasional shopping trips. Computing,

furniture and home improvement all continued to do well as the public invested

in home comforts and remote working."

     PAUL MARTIN, UK HEAD OF RETAIL AT KPMG: "June saw pent up consumer demand

released, with total sales finally back in positive territory - up 3.4% on the

same month last year. While the easing of social distancing restrictions is of

course welcome news, the challenges and longer-term consequences for the

industry have far from disappeared, and not all categories of retail are

benefitting from this post-lockdown boom.

     ANDREW GOODACRE, CHIEF EXECUTIVE AT THE INDEPENDENT RETAILERS' ASSOCIATION:

"We're trying to find some green shoots. And they're just not there."

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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