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Fears over war’s impact and cost of living force High Street and online sales down – what are Growth 2000 retailers doing?

Where is the footfall?

Where is the footfall?

February’s retail sales figures from the Office for National Statistics (ONS) saw an unexpected fall of -0.3% in the amount of goods sold during February. Even the value of goods bought online fell by -0.7% against the previous month – and many smaller retailers are already feeling the pinch.

Government High Streets Task Force expert and ShopAppy founder, Dr Jackie Mulligan: “February’s fall in retail sales certainly wasn’t unexpected for the small shops on the UK’s high streets. Fortunately, weekly footfall on the UK high street started to pick up in March, as the weather improved, but in February the thousands of businesses we work with said it was extremely challenging and this data reflects that.

“We have to hope that the greater emotional bond between people and their local high street shops will power sales in the months and years ahead, because small high street businesses are having to cope with significant levels of debt accrued during the pandemic. There are no end of challenges for shoppers, with the cost of living crisis significantly eroding people’s spending power, but we’re urging people to shop local whenever they can. Ahead of Mother’s Day, go to your local high street shops to buy flowers, treats and food, because they need all the support they can get in the current climate.”

Anna Hamill, founder at Belfast-based card and gift retailer, And Hope Designs: “There’s a lot of talk about ghost towns due to the pandemic and the cost-of-living crisis, but things are eerily silent online, too. Revenues are down 67% year on year for me. Even in the run-up to Valentine’s Day and Mother’s Day things have been very quiet, which is particularly worrying given that I sell many cards and gifts specifically related to occasions like these. It’s a brutal climate for all retailers, online and bricks and mortar. People either aren’t spending or don’t have the money to spend. You can sense a real shift in sentiment.”

The home delivery expert ParcelHerosays this was largely down to fears about rising household bills, which this week’s mini-budget will have done little to calm.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: “After a healthy pickup in spending in January of 2%, this fall in the amount of goods sold compared to January was disappointing for retailers, and does not augur well for future months. This was particularly disappointing considering that England’s remaining Covid-19 restrictions ended on 24 February. Fears over a potential invasion of Ukraine, which eventually happened (also on 24 February), together with eye-watering rises in home energy bills, meant consumers kept their hands firmly in their pockets and away from their wallets.

“Online sales fell -0.7% against January 2022 and by a steep -18.1% against the same period last year, February 2021. Online spending now accounts for 27.8% of all retail spending, against a high of 36.5% of all retail spending in February 2021. That doesn’t mean High Street stores should be celebrating the demise of online shopping any time soon, however. In January, e-commerce took just 25.3% of the entire retail spend, so that’s an increase in e-commerce’s market share of 9.8% month-on-month.”

How SME retailers are reacting

To gauge how the smaller end of the retail market is responding, we talked to a range of retailers and brands.

Anna Hamill, founder at Belfast-based card and gift retailer, And Hope Designs: “There’s a lot of talk about ghost towns due to the pandemic and the cost-of-living crisis, but things are eerily silent online, too. Revenues are down 67% year on year for me. Even in the run-up to Valentine’s Day and Mother’s Day things have been very quiet, which is particularly worrying given that I sell many cards and gifts specifically related to occasions like these. It’s a brutal climate for all retailers, online and bricks and mortar. People either aren’t spending or don’t have the money to spend. You can sense a real shift in sentiment.”

Anthony Dibble, founder of luxury men’s clothing retailer, Pickapocket: “We desperately need another round of SEISS grants to help us emerge from the pandemic. Yes, restrictions are now gone but December was terrible, January is always terrible, and though things have picked up in February and March, we’re still in recovery mode. We specialise in weddings and clearly there have been far fewer of them over the past two years. The Government seems to think we can all just pick up and carry on where we left off.”

Ben Helyar, general manager at online discount store, Discount Experts: “Consumer behaviour has changed hugely over the past couple of years due to the pandemic. There is a huge amount of uncertainty hanging over the economy, made worse by spiralling inflation. People are cautious about spending, or simply don’t have the buying power they did, and this trend looks set to stay for the foreseeable future. Price and value will be king to the consumer moving forward.”

Victoria Jenkins, CEO of London-based fashion retailer, Unhidden: “Sales are currently slow for us, which is no surprise given that the cost of seemingly everything is going through the roof. Inflation and soaring energy bills are hitting people’s wallets hard. An additional challenge for us, compared to fast fashion brands, is that we are made to order, which means producing items is much more time-intensive. We are also currently targeting a demographic that the fashion industry, sadly, has long excluded, namely the disabled community. We are still trust building with our prospective customers and that’s another challenge right now.”

Dave Elsom, Printmaker at Sombrero Printmaking: “I sell online and through independent shops, cafes and studios. I’ve noticed a slight reduction in online sales, but I’ve also noticed that the most popular items that sell are the ones that mirror what we’re witnessing in our society, for example, prints that make fun of the Government and also items that are fundraisers for The Trussell Trust (food banks) and the British Red Cross. This tells me that people are being a bit more careful with their money but when they do spend they want to support others as much as they can.”

Jenny Blyth, owner of Storm In A Teacup Gifts: “My business is struggling, my mental health is declining and I’m extremely worried about the future.”

Anna Cargan, founder of the Barrow-in-Furness-based second-hand childrenswear business, Buildabundle: “We’re fortunately seeing fairly strong sales but then we’re an online second-hand children’s clothes retailer, which makes us quite attractive in the current difficult climate. Firstly, our items are essentials rather than luxury items and secondly the fact that they’re second-hand makes them cheaper than the high street, as well as more sustainable environmentally. We’re therefore offering people an easy and quick way to buy clothes for growing kids at a cheaper price than elsewhere. This makes us more resilient to downturns in general spending. It also makes us more determined to continue providing the best value that we can, because we’re parents ourselves and recognise how much families are feeling the pinch with the cost of living. We’re pleased to be able to make at least one bill more manageable for our customers.”

Jez Lamb, founder of the Wirral-based craft beer marketplace, Beers @ No.42: “The squeeze on people’s finance is industrial and it’s having a huge impact on retail sales. Whilst many may not class beer as a ’luxury’ item, when you stock the more premium beers we do then consumers are likely to think twice and our sales figures show that.”

Ruth Bradford of Bristol-based The Little Black and White Book Project: “It’s definitely seat of the pants stuff at the moment. Sales have dropped off a cliff in the online space since the start of the year and it feels like it’s getting worse, not better. We are watching every penny, too, so I can’t blame people. But when it’s your own business that you are fighting to help survive, all you hope for is some good news when you wake up in the morning in the form of a sale. Driving sales right now is like wading through treacle and I’m watching my cash flow everyday to make sure I can afford the next bill. All we can do is wait it out and try to stay positive. After all, people don’t want more doom and gloom, they want to buy from successful and upbeat businesses so for now it’s best foot forward with a smile on my face, however much anxiety there is on the inside.”

Gaynor Lockwood Edwards, head honcho at crochet business, Quirky Cactus: “If you’re a small independent business, all I can say is get on the Not On Amazon Facebook page. It turbocharges sales, which is what everyone needs in the current climate. Every time I pop a post on Not On Amazon, I get lots of orders, so many that I’ve had to stop posting as frequently as I can’t keep up.”

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