Welcome news that this week’s budget didn’t introduce an ecommerce tax – things are tough enough in retail at the moment. But has the budget done anything that will actually help growing UK retailers?
Worrying news comes that this year’s peak is set to be one that is going to see higher prices and low volumes, with many consumers already saying that they have budgeted to spend less this year than ever before. Couple that with rising costs of fuel impacting an already squeezed supply chain and things look a bit iffy.
However, there are many reasons to hope that much of this won’t come to pass; we aren’t necessarily in for a ‘bleak peak’, rather we are set for a slow one and one that is much more online.
Globally, we are looking at a peak season that is going to be the biggest on record, topping $910bn, with many shoppers having started earlier. This ‘long tail’ peak may well be driven by consumers who are determined to spend less, however as the weeks roll by they will no doubt spend less each time, but ultimately buy more.
That is because they are looking online and looking for bargains. In fact, in 2021 £490bn of in-store sales have moved online, with cross border shopping increasingly important to shoppers as they, one, find what they are looking for, two, at a price they can afford and, three, don’t care where things come from, so long as they turn up.
This shift is perhaps bad news for UK retailers fearing yet more sales erosion from overseas, but it is also an opportunity for Growth 2000 retailers to grow their sales overseas. This phenomenon is global: the opportunities are everywhere.
One case in point is Maisons du Monde, a French homewares retailer which is seeing its cross-border sales boom. International stores experienced a boost during the quarter, with sales growing 5.0% y-o-y to €107m and now account for 47% of total store sales compared to 44% in Q3 2020, while store sales in France decreased 5.7% y-o-y to €122m. The homewares specialist bucked the retail trend and opened two new stores during the quarter (one in France and the other in Switzerland), signifying its continued confidence in physical retail.
Similarly, online beauty seller Beyond Beautiful has also had a bumper year, with revenue for 2021 up 156% for the period of 1st January to 30th September against the same period in 2019. It is investing in a new site and new platform to continue this boom.
Even online fancy dress seller Party Delights is bullish, logging its most successful Halloween sales since the company was set up 20 years ago. The £35m turnover company has achieved 36% more Halloween sales than Party Delights achieved for Halloween 2019 and 65% more than Halloween 2020, which was impacted by pandemic lockdowns. Sales are expected to gather even more momentum as Halloween approaches.
It seems that, while there are struggles, much of the Growth 2000 are doing OK – maybe ever the small give aways in the Budget may help still further?
