Retail sales in the United Kingdom surged at their fastest pace in five years after government officials eased restrictions amid the coronavirus pandemic.
The country’s Office for National Statistics logged a 13.9% month-over-month improvement in the amount of goods sold last month — higher than economists’ anticipated 8% gain. The year-over-year contraction of 1.6% was also less than predictions of a 6.4% drop.
British consumers gradually returned to spending in the middle of June, when businesses were able to resume operations and many workers returned to their posts. Junes month’s retail sales report followed a record decline in April and a partial recovery in May, which was upwardly revised to a rise of 12.3%.
In March, most of Europe went into lockdown to help prevent the spread of COVID-19, which has infected more than 15.5 million people around the world and led to at least 634,900 deaths. Authorities had mandated that nonessential businesses dim their lights and urged the public to shelter in place, while international travel was brought to a near standstill.
Consumers also held onto their pocketbooks in fears of a global economic downturn. Save for some retailers that sold household products and other essential items, the industry itself was dealt a massive blow. Many chains — including Marks & Spencer, Ted Baker, Harrods, John Lewis and Topshop parent Arcadia — were forced to slash jobs, while Debenhams, Oasis and Warehouse fell into administration during the past few months.
The outbreak has contributed to a gloomier picture for British retailers, who have already been squeezed in recent years by rising rents, low margins and uncertainty surrounding Brexit. According to the Centre for Retail Research, lost sales in the U.K. as a result of the health crisis are expected to total roughly 17.28 billion pounds this year. The agency further predicted that 20,622 stores will close across the region, compared with 16,073 in 2019, and that 235,704 people will lose their jobs, up from the prior year’s 143,128. Experts have warned that the economy could take several months, likely even years, to make a full recovery.