These headwinds are having a real impact on bottom lines as the findings of EY-Parthenon’s Profit Warnings analysis for 2022 found. “Christmas trading updates from retailers over the last few weeks have been varied and reflect a highly pressurised market in which companies are competing for the same share of squeezed wallets amid rising costs and overheads. The latest EY ITEM Club Winter Forecast warned that the UK is set for a deeper recession than previously thought with consumer spending likely to fall 1.4% this year followed by growth of 2.3% in 2024. “While not unexpected during what is, traditionally, a quiet trading period, the backdrop of rising inflation and falling consumer confidence means today’s figures are likely to be a sign of things to come. Silvia Rindone, EY UK&I retail lead, says: “Although retail sales volumes marginally increased by 0.5% month-on-month in January, largely due to promotional activity, when looking at the bigger picture, sales volumes fell by 5.7% in the three months to January when compared with the same period last year. Ecommerce spending was 31.2% lower than a year earlier, and 4.9% down on December. ‘Other’ retailers, a category that includes electrical retailers, jewellers, toy and bookshops, saw 14.4% of sales take place online. Household goods were 21.2% online, with spending 3.6% down on the previous year and a sharp fall (-21.3%) in online spending compared to December. Some 24.6% of clothing, footwear and textiles sales were online, with spending 3.1% higher than a year earlier and 2.0% higher than in December. Spending was 9.2% down on the previous year and 6.4% lower than in December. Just over a fifth of non-food retail sales took place 20.3% online. Spending was 10.3% lower than a year ago, but 2.3% higher than the previous month. ![]() Non-store retailing, a category primarily made up of online-only retailers but also including market stalls and auctioneers, saw 89% of sales take place online. Some 8.3% of UK food sales were online in January. Shoppers spent 9.2% less online than a year earlier, and 2.1% less than in December, following month-on-month falls across all categories except clothing and non-store retailing.įood sales were 4.9% down on a year earlier – and 6.1% less than in December. The proportion of sales taking place online peaked in February 2021 at 36.1%. The proportion of sales taking place online has generally been around 26% in recent months, although it fell both in June 2022 (25.3%) and also a year ago in January 2022 (25.3%). This is still well above pre-pandemic levels some 19.8% of UK retail sales were in February 2020, ONS figures suggest – but it is the lowest level since March 2020, when 22.3% of sales were online. Shoppers also bought more household goods (+0.8% by volume) and fewer clothes (-2.9% by volume), the latter following four months of growth.Ī quarter of British retail spending (25%) took place online in January, the ONS estimates. Department store sales volumes were up by 0.8% in January from a fall of 3.1%, as “some retailers reported sales starting as early as Christmas Eve and running until the end of January 2023”. Sales grew (+0.2%) in non-food stores, and by 0.3% (+0.6% by volume) with non-store retailers. The ONS says retailers suggest customers were buying less as food prices and the cost of living rose. Shoppers bought 0.5% fewer products in food shops in January, having spent 0.7% less in December. Sale effect? However, the volume of sales was still 1.4% below pre-Covid 19 levels. But they also spent 0.5% more than they did in December, and bought 0.4% more goods. Shoppers spent 3.7% more last month than a year earlier to buy 5.3% fewer goods, excluding automotive fuel, the report estimates, as the effect of inflation continued to be felt. Online, clothing and footwear saw the largest rise in ecommerce spending while household goods and ‘other’ retailers saw the sharpest falls, according to the ONS’ Retail Sales, Great Britain: January 2023 report. The figures also suggest a strong return in-store. This appears to have come as shoppers spent more in the January sales than in December – continuing to look for bargains as the cost of living continued to rise. A quarter of sales took place online in January, ONS figures suggest today, as the proportion of sales taking place over the internet fell to the lowest level since March 2020.
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