UK DIY & Gardening Sector Report summary
December 2020
Period covered: Period covered: 01 Nov 2020 – 28 Nov 2020
Retail sales rose by 2.3% in November, year-on-year, according to Retail Economics. Total online retail sales rocketed by 79.6% in November, value and non-seasonally adjusted, according to ONS. Shop price inflation fell by 1.2% in November, excluding fuel, according to ONS. DIY & Gardening retail sales rose by 13.7% in November, year-on-year, value and non-seasonally adjusted, according to Retail Economics. Average weekly sales for DIY & Gardening were £181m in November, according to Retail Economics.
DIY and Gardening – November 2020
DIY & Gardening sales growth accelerated by 13.7% in November, year-on-year, following a record rise on the previous month. This was against a weak comparison a year ago when sales growth fell by 1.9%. November’s sales growth dipped below the three-month average of 14.3% (due to the inclusion of October’s exceptional performance) but remained considerably ahead of the 12-month rolling average of 3.0%.
Looking ahead
It remains to be seen if the category can carry the strong performance into the final month of the year, given increased disruption during December with tighter Covid restrictions. What is more, average weekly spending during December within the category is typically the weakest of any month, however, we know 2020 was like no other year! Heading into 2021, supportive factors include more time being spent indoors and a strong housing market which is likely to continue.
Macro Factors – Housing Market Activity
Mortgage approvals accelerated in October to 97,532 up from 92,091 in the previous month and significantly ahead of the previous six-month average of 51,810. This was the sharpest rise in mortgage approvals since September 2007. Mortgage approvals are currently 33% higher than in February 2020 and up by 51% compared to the same month a year ago. The number of re-mortgaging approvals rose marginally on the previous month, totalling 32,851 in October up from 32,773 in September. This was lower the previous six-month average of 33,980.
Macro Factors – Consumers
Household consumption rose by 18.3% in Q3 2020 on the previous quarter, totalling £294,468m. This follows a 23.6% contraction in the previous quarter. Household consumption remains 12.4% below its Q4 2019 level. GfK’s Consumer Confidence fell by two points to -33 in November, 19 points lower than in the same month a year ago and the lowest reading since May. Three measures within the index decreased compared to the previous month while two remained… read more
Macro Factors –Ipsos Retail Performance
As a result of the government imposing new lockdown restrictions and the closure of non-essential stores in November, IPSOS did not track shopper numbers in November. However, IPSOS forecast overall UK footfall to fall by 55.7% in December 2020 compared to the same month a year ago.
Macro Factors –Labour Market
The latest ONS labour market data shows some recovery in hours worked, despite redundancies hitting a record high as hospitality and physical retail remains under intense pressure from Covid-19 restrictions. The number of paid employees is down some 819,000 in November compared with March 2020 according to flash estimates using PAYE data.
Macro Factors –Earnings
For October in nominal terms (unadjusted for price inflation): Average regular pay (excluding bonuses) for employees in Great Britain was £527 per week before tax and other deductions from pay – up from £509 per week a year earlier. Average total pay (including bonuses) for employees in Great Britain was £560 per week before tax and other deductions from pay.
Macro Factors –Costs, Prices and Margins
Sterling’s trade weighted index rose in November, up 1.1% on the previous month. The index has been impacted by the ongoing uncertainty surrounding Brexit negotiations with a deal between the UK and EU not yet reached. In terms of exchange rates, the £/$ rate is currently around 1.34, while £/€ dipped to around 1.10. Both commodity indexes we track rose in December. Indeed, the Thomson Reuters CRB Index fell by 10.9% year-on-year from -15.6% in November.
Factory gate inflation rose to -0.8% in November, up from -1.4% in the previous month. On a month-on-month basis, output inflation rose by 0.2%, the sharpest monthly increase since July 2020. Five product groups provided a negative contribution to the annual output inflation rate in November … read more
How has the pandemic affected your business turnover, compared to normal?
Source: Source: ONS, Business Impact of the Coronavirus survey, 16-29 November
