What:
The chart shows total retail sales volumes (excluding automotive fuel) between January 2015 and April 2021. Rather than looking at volatile monthly growth rates, we analyse the retail sales volumes index, which shows the total level of retail sales volumes in a given month.
All other things being equal, the index should increase over time, driven by population and income growth. Before the pandemic struck, the level of sales volumes reached 103 in January 2020. It then plummeted to 84 as lockdown restrictions impeded on sales in physical stores.
Following the lifting of lockdown 1 restrictions, the index recovered to 112 before falling again under lockdown 2 and 3 restrictions. However, sales volumes have since been on a clear upward trajectory and the index reached a record high of 116 in April.
Why:
Retail sales are volatile and heavily depend on the ability to spend as the chart shows. Despite e-commerce now accounting for around a third of all retail spending, physical shops still make up the majority of sales volumes and retail sales performance therefore suffers particularly badly under certain restrictive measures.
The good news is that sales volumes have recovered well, and stronger than many had anticipated at the start of the year, which should help the consumer-led economic recovery in the months ahead.
