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By David Milliken and William Schomberg
LONDON, Aug 20 (Reuters) - British retail sales surged past
their pre-coronavirus level in July, the first full month that
shops selling non-essential goods were open since the country
went into lockdown in March.
The unexpectedly robust figures show the strength of
consumer demand even as other parts of the economy - and much of
the retail sector itself - struggle to recover from recent hefty
losses.
Retail sales volumes rose by 3.6% from June - above all
forecasts in a Reuters poll of economists - and were 1.4% higher
than in July 2019, the Office for National Statistics said,
representing a sharp recovery from double-digit falls in April
and May.
Compared with February, before Britain was broadly affected
by the pandemic, sales were 3.0% higher.
Separately, official figures showed public sector net
borrowing, excluding banks, totalled 26.669 billion pounds
($35.33 billion)in July, just above economists' average 29.45
billion pound forecast.
Britain's retail sector has enjoyed a much faster bounce
back than almost all other parts of the economy hit by the
coronavirus lockdown.
But behind the headline figures there has been contrasting
experiences for different types of retailer.
Supermarkets and other food shops have enjoyed year-on-year
sales growth as British people eat at home more. Online sales
have boomed, and household goods stores have seen strong demand.
But other areas - especially high-street clothing retailers
- have suffered, with clothing and footwear sales still 25% down
on a year ago.
Companies such as Marks & Spencer, Boots <WBA.O<,
John Lewis, Dixons Carphone and WH Smith
have announced plans for thousands of job cuts.
Economists fear the broad retail recovery could prove
temporary.
"July’s retail sales likely will represent this year's
peak," said Samuel Tombs of consultancy Pantheon Macroeconomics.
Restaurants and bars began to reopen in July - giving people
more options for their spending - and unemployment is forecast
to rise sharply once a government job support scheme stops at
the end of October.
($1 = 0.7549 pounds)
(Reporting by David Milliken; Editing by Alistair Smout and
Kate Holton)
