More sales than ever take place online in locked-down February, while in-store sales fall - The Entrepreneurial Way with A.I.

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Tuesday, March 9, 2021

More sales than ever take place online in locked-down February, while in-store sales fall

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Ecommerce took its largest share of the market yet in February during lockdown 3.0, according to the latest figures.

 

The British Retail Consortium (BRC) found that 60.6% of UK retail sales took place online last month. That’s a higher proportion than during the previous two lockdowns. The latest data from both the IMRG and the British Retail Consortium (BRC) show digital sales grew strongly during the month – by 69.5% and 82.2% respectively – and IMRG says that mobile sales were 170% ahead during the month.

 

But the fast online growth comes in the context of total retail spending that’s only 1% up on last year, according to the BRC, while in-store sales are down by 38.9%. Barclaycard research shows shoppers spending more on essential goods but much less on non-essential items than they did a year earlier.

 

BRC: online takes a record share of UK retail sales

Online sales grew by 82.2% in February as non-essential shops continued to be closed during lockdown 3.0, according to the BRC, which found 60.6% of UK retail sales took place online during the month - up from 30.8% a year earlier. That’s a record share of retail sales – passing both last November, when 59.3% of sales were online, and last June, when more than half of retail sales (50.7%) were online for the first time.

 

But across all channels, the growth was more modest, as in-store sales fell by more than a third. UK retail sales grew by 1% in total in February compared to the same time last year, and by 9.5% on a like-for-like (LFL) basis that strips out the effect of store – and business – openings and closures. In-store sales fell by 38.9% in total, and by 21.4% LFL in the three months to February - better than the 12 month average decline of 31.4%.

 

Helen Dickinson, chief executive of the British Retail Consortium, says: “February saw a return to growth after a disappointing start to the year. The Prime Minister’s roadmap to reopening prompted a burst in spending on non-food items, such as school uniforms. Furthermore, with another month of lockdown still to go, online sales were high, rewarding the retailers who have invested digitally. Couples staying home for Valentine’s Day found themselves splashing out at their local supermarket, benefitting food sales. Meanwhile, the continued closure of so-called ‘non-essential’ retail has meant that non-food in-store sales remained significantly down, underlining the importance of a successful reopening in April.

 

“While the uptick in sales is encouraging, many retailers are concerned about the months ahead. Many retail businesses will be hoping that customers will return to shops, and have spent hundreds of millions on making their premises Covid-secure, but previous reopenings have shown that demand can be slow to come back. Government has a vital role to play in building up consumer confidence across the country to power the spending-led recovery.”

 

Paul Martin, UK head of retail at KPMG, says: “With the government’s roadmap out of lockdown in place and the vaccine rollout moving at pace, there is finally light at the end of the tunnel for non-essential retailers. High streets will be counting down the weeks until they can finally open their doors and hoping consumers swap their slippers for trainers as they start to hit the shops.

 

“Although the Budget threw retailers a short-term lifeline with the extension of Covid support packages until after the summer, conditions will continue to be incredibly challenging as they face subdued demand, thinner margins and rising logistics costs, alongside the accelerated structural changes to the sector. All hopes will be pinned on consumers wanting to break free from home to browse the stores that have been out of bounds for months.”

 

Strong online and mobile sales: IMRG

Shoppers spent 69.5% more online in February than they did a year earlier, according to etail trade association the IMRG. That’s well ahead of the longer-term trend over the last three (+57.1%), six (42.5%) and 12 months (+42.7%).

 

Sales on mobile devices (+170% year-on-year) grew particularly strongly, with sales via tablet computers (+48.4%) also well ahead of last year.

 

Spending was up across all categories, led by electricals (+158.5%), home and garden (+131%), while online sales of beer, wine and spirits (+64.7%) were also well ahead. Categories that have suffered recently benefited from the upward trend, including clothing (+21.3%) and footwear (+8%).

 

Lucy Gibbs, managing consultant – retail insight at Capgemini, says: “February growth remains strong as we near a full year since the pandemic closed the high street for the first time. Online growth has been highest in this third national lockdown, however as we approach the year-on-year comparisons against the swings of 2020 we are likely to see some interesting metrics play out over the next few months.

 

“For example, electricals and home & garden, up 158% and 131% in February, have seen unprecedented growth figures since the pandemic began. This will mean that even if there is continued strong demand in these categories, we are likely to see swings to the negative compared to last year.”

 

Andy Mulcahy, strategy and insight director at IMRG, says: “It’s become common for people to look for the ‘new normal’ across industries, but it might be too early to be focusing on that. Instead, it is more useful to think of a ‘current normal’ as things are still so unpredictable and susceptible to sudden shifts in customer behaviour. For example – even though there is a roadmap out of lockdown and the vaccination programme is going well, it’s difficult to anticipate exactly how people will behave as restrictions are eased.

 

“The ‘current normal’ in retail is for sustained pandemic-high growth rates across almost every product category. During lockdown one (22 Mar-15 Jun), the average rate of growth was +47%; for lockdown three (27 Dec-now) it is +74%. That rate of growth cannot be sustained once we get into April, but the extent to which spend will be diverted strongly away to ‘experience’ options such as travel, going out, live events etc. is a very tough question to answer.”

 

Barclaycard: spending up on essential items – but down on non-essentials

Barclaycard figures detected a 13.8% fall in consumer spending in February, but says that spending on essential items grew by 5.3% year-on-year - mostly thanks to online grocery sales (+115.2%) that contributed to a 17.4% rise in supermarket spending.

 

Spending in categories that have benefited from lockdown was particularly high, with digital subscriptions (+42.6%), takeaways (+30%), and meal kits (+63.3%) all benefiting.

 

But spending on fuel (-30.2%) and non-essential items (-22.1%) were all down.


Barclaycard’s analysis suggests that online sales accounted for 53.7% of all UK retail spending, especially at online marketplaces and catalogue shops (+100%). Online specialists (+94.9%) such as florists and jewellery stores benefited from a Valentine’s Day uptick.

 

Raheel Ahmed, head of consumer products at Barclaycard, said: “Despite a very challenging environment, it’s inspiring to see many retailers remaining resilient and doing what they can to maximise online sales while physical stores remain closed. In addition, as we all spend more time at home, we’ve seen home subscription services, fresh food boxes and meal-kit services become a popular mainstay of life in lockdown.

 

“The start of spring, the government’s roadmap out of lockdown, the vaccine roll-out and the extension to the stamp duty holiday are contributing to a lift in the nation’s spirits. With consumers generally feeling more optimistic, there is a strong indication of a more prosperous period to come as the long-awaited recovery and life after lockdown begins.”

 



via https://AiUpNow.com March 9, 2021 at 03:30AM by Chloe Rigby, Khareem Sudlow,