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UK Retail Industry Outlook Report summary

June 2021

Period covered: Q2 2021

Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day membership trial now.

Labour market

  • Unemployment, employment and job vacancies continue to recover as restrictions ease, but the recovery is uneven.
  • Payroll estimates for the quarter to May 2021 show the number of payroll employees increased for a sixth consecutive month, rising by 141,000 employees, or 0.5% on last year (HMRC).
  • However, it remains some 553,000 below pre-pandemic levels – with those aged under 25 years, working in hospitality, and living in London most impacted.

Disposable income

  • Annual growth in average employee increased for a ninth consecutive month in April. Total pay growth rose at the fastest rate in more than 20 years at 8.4% in the month.
  • However, this is being driven in part by compositional effects from a fall in the number and proportion of lower-paid jobs. The ONS estimates the net impact of recent job losses accounts for approximately 1.5% of average pay growth.

Confidence

  • Consumer confidence hit a milestone in May, with GfK’s index bouncing back to pre-lockdown levels at -9.
  • The continued roll out of the UK’s vaccination programme has boosted confidence as the economy had been reopening in-line with the road map.

Propensity to Spend

  • Consumers feel more confident about making big ticket purchases compared to last year. GfK’s major purchases index rose by five points to -7 in May 2021, 40 points higher than it was a year earlier. And consumers are generally in a stronger financial position.
  • Almost half (45%) of consumers have put more money into savings since the pandemic, supported by households simply being unable to spend as they normally would.
  • The housing market has been resilient to the crisis. Unlike the previous 2007-08 financial crisis, unprecedented levels of government intervention have supported homeowners.

Return to stores

  • As shops and indoor hospitality reopens from late spring, retailers had hoped for a bounce back in footfall. But increasing shopper numbers are likely to lag the easing of restrictions as consumers remain cautious.
  • Anxieties have heightened from the Covid-19 Delta variant, with Government guidance to avoid certain locations.

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As lockdown restrictions ease which locations do you think you'll feel most comfortable shopping in?

Source: Retail Economics, nationally representative survey 8 April 2021

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  • Future-focused insights
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