Online sales grew by a third as shoppers shielded from Covid-19 in 2020 – but total sales fell by a record 0.3%: BRC - The Entrepreneurial Way with A.I.

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Tuesday, January 12, 2021

Online sales grew by a third as shoppers shielded from Covid-19 in 2020 – but total sales fell by a record 0.3%: BRC

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UK online sales grew by more than a third in 2020 as shoppers shifted to ecommerce to stay safe during the Covid-19 pandemic – but total sales across all channels fell by a record 0.3%, according to new figures out today.

 

The annual fall in overall total sales is the lowest since BRC-KPMG Retail Sales Monitor records began – a quarter of a century ago in 1995. Within that, ecommerce grew by 36.2% across the whole of 2020, compared to 2019, but across all channels, retail sales fell by 0.3%. Within that, food sales grew by 5.4% but non-food sales were 5% down on 2019. Some 46.1% of UK retail sales took place online – up from 31.1% in 2019.

 

“Covid has led to 2020 being the worst year on record for retail sales growth,” says Helen Dickinson, chief executive of the British Retail Consortium (BRC). “Physical non-food stores – including all of ‘non-essential’ retail saw sales drop by a quarter compared with 2019. Christmas offered little respite for these retailers as many shops were forced to shut during the peak trading period.”

 

She adds: “With shops still closed for the foreseeable future, costing stores billions in lost sales, many retailers are struggling to survive. To avoid the unnecessary loss of shops and jobs, Government should announce an extension to business rates relief for the worst-affected businesses as soon as possible. With many retailers making decisions over their future, the Government must act decisively.”

 

How shoppers bought in the run-up to Christmas

In December alone, online non-food sales grew by 44.8% – well ahead of the 6.7% growth recorded in December 2019 – according to the BRC. Almost half (47.8%) of all retail sales took place online – up from just under a third (32.1%) a year earlier.

 

Sales across all channels grew by 1.8% in total, against growth of 0.2% in December 2019. That’s below the three-month average growth of 2.5%. When measured on a like-for-like (LFL) basis that strips out the effect of store – and business – openings and closures - sales were 4.8% ahead of last December, when they had grown by 0.2% on the previous year.

 

Paul Martin, UK head of retail at KPMG, says growth was seen in December as spending shifted from categories including travel and leisure. “Once again we saw big swings in the types of products being purchased and the channels used for shopping, with much of the growth taking place online where nearly half of all non-food purchases were made.,” he says. “Household related and food item purchases were top of Christmas shopping lists with historic growth rates in contrast to fashion, accessories and beauty products which experienced double-digit declines.

 

“Further restrictions and the closure of many non-essential shops resulted in a dismal December performance for those retailers on the high street and conditions will continue to be challenging as we enter another national lockdown. Consumer behaviour will also continue to evolve and retailers must embrace the changes if they are to hold on to hard won customers and generate profitable sales.”

 

In the three months to December, in-store sales of non-food goods fell by 24.7% in total, and by 14.4% LFL. The LFL figure remained in decline even when stores that are only temporarily closed were excluded.

 

Martin adds: “Looking ahead, fortunes will be mixed but pent up savings and a successful vaccine roll out will help support recovery in the retail sector later in the year. Retailers will also be hoping that the reopening of high streets and shopping centres will see a return to more normal levels of footfall.”

 

Non-food retail sales grew by 5.1% LFL but fell by 1.5% in total in the three months to December, according to the BRC.

 

Barclaycard figures also out today show online retail spending using its cards was up by 52.2% on the previous year. Beneficiaries included specialist retailers, such as toy shops, jewellers and gift shops (+61.9%) and clothing retailers (+34%). But spending was down by 8.3% in-store, with clothing (-7.3%) and At the same time, in-store spending was down by 8.3%, especially at department stores (-15.2%) both missing out.

 

Rising spending on food

The BRC figures show food sales growing by 6.8% LFL and by 7.3% in total in the three months to December.

 

Susan Barratt, chief executive of grocery analyst the IGD, says grocers had their best Christmas ever as shoppers bought food instead of going out to celebrate.

 

She says: “Tightening restrictions across much of the country limited other sales channels and enabled supermarkets to get the full benefit of people celebrating with food and drink. Though last-minute changes put the brakes on larger family gatherings, shoppers nevertheless sought to make up for their disappointments by trading up to treat themselves and their immediate households with premium and luxury lines.”


But she said confidence would be fragile “as shoppers grapple with the impact of the new national lockdown, economic downturn and a new relationship with the EU.”

 

The Barclaycard figures also show shoppers spending more on food this year, with online grocery sales 88% higher than a year ago. Spending on essential items grew by 4.5% at the same time. But spending on hospitality was down at both bars and pubs (-71.4%) and restaurants (-65.4%).

 

Raheel Ahmed, head of consumer products at Barclaycard, says: “Changing restrictions continue to have an impact on our spending habits – which was particularly acute across the high-street and hospitality sectors in December, with restaurants, pubs and bars hardest hit during a low-key festive season in the majority of the UK. As a result of further restrictions, online grocery spend surged and fuel declined as the majority cancelled their plans and stayed home for the holidays."

 

Ahmed adds: “Small businesses have continued to remain agile to these changing consumer habits – with many going online for the first time. From dog walking services to subscriptions of weekly meal kits, small businesses are exploring new ways to reach their customer base. With the latest government guidance to stay at home and a vaccine roll-out on the horizon, we are all hopeful of a brighter and more prosperous year ahead. Yet for now, the reality of lockdown life remains and it’s once more a hugely challenging time for high-street retailers as well as the hospitality, leisure and travel industries.”

 



via https://AiUpNow.com January 12, 2021 at 03:21AM by Chloe Rigby, Khareem Sudlow,