Retail sales in Great Britain grew for the first time in six months in October as shoppers started buying early for Christmas, likely linked to supply chain fears. Ecommerce fell at the same time, with the share of sales taking place online falling to their lowest level since the onset of the Covid-19 pandemic.
Retail sales grew by 0.8% in October, according to the ONS Retail Sales report for October 2021. In previous months the figure has steadily declined from the high point seen when stores reopened in April 2021 from the third UK lockdown – the longest slump, said the ONS last month, since records began in 1996. At the same time 27.3% of sales took place online – as ecommerce took its smallest share of sales since March 2020 (22.5%), the first month of the Covid-19 pandemic. Ecommerce sales, however, are still ahead of pre-pandemic February 2020 (19.7%).
How shoppers spent across sales channels
Shoppers spent 0.9% more than they did a year ago to buy 1.9% fewer goods – excluding automotive fuel – and 2.1% more than last month to buy 1.6% more goods.
The upturn in retail sales was seen in non-food stores (+4.2%), including clothing (+6.2%) – now only 0.5% below pre-pandemic levels – and especially the ‘other’ non-food category (+7.2%), thanks to sales at secondhand, toy, and sports equipment shops. Some retailers report a sales boost from early Christmas trading, says the ONS.
How shoppers spent online
Online sales were down both compared to last October (-8.2%) and last month (-0.6%), with 27.3% of retail sales taking place online. Online food sales fell both on last year (-1.8%) and last month (-1.8%), although the proportion of food sales taking place online stayed steady (10.4%).
A lower proportion of non-food sales were online in October (23.4%) than in September (24.9%). However, non-food ecommerce sales fell compared to both the same time last year (-7%) but grew slightly on last month (0.1%).
Some 27% of department store sales were online, after spending fell sharply compared to last year (-17.4%) and more moderately (-1%) on last month. Online sales of household goods were lower than both last year (-12.3%) and last month (-2.6%), accounting for 23.5% of sales in the sector. And 19.3% of sales at ‘other’ retailers – from toyshops to bookshops – were online, with ecommerce spending lower than last year (-1.7%) but higher than last month (+1.6%).
More than a quarter (26.4%) of clothing, footwear and textile sales were online in October, with ecommerce sales growing slightly compared to last year (+0.6%) and last month (+1.2%).
Non-store retailing – predominantly including pureplay retailers – accounts for 48% of online sales. In October, 84.7% of sales in the category were online. That’s lower both than last year (-11%) and last month (-0.8%).
Emma Sutton, chief customer officer, EMEA business transformation at Oracle Consulting, says supply chain issues are likely to be encouraging shoppers to buy earlier for Christmas. “We’re in the run up to big spending over the festive period and unreliable supply chain struggles mean consumers can’t be patient and leave their shopping for December,” says Sutton. “Nine in 10 UK consumers are worried supply chain disruption is here to stay so it’s no surprise consumers are getting their shopping in early to avoid being let down by their favourite brands down the line.
“On the flip side, with pressure mounting to meet consumer needs, businesses are feeling more than just the pinch. Three-quarters of UK consumers say that future delays could cause them to cut ties with their favourite brands permanently – a worrying consensus for recovering businesses. Retailers need to face these concerns and put in place solutions, such as advanced tech to stabilise and add visibility into the supply chain, to keep consumer loyalty.”
ParcelHero head of consumer research David Jinks, says: ‘It’s great that the High Street enjoyed a better month. Sports and toy store sales volumes boomed by 7.6% as Brits responded to Christmas supply warnings and started shopping early. Clothes stores will be relieved by increased sales of 6.2%. It was particularly heartening to see fashion sales are now only 0.5% below their pre-pandemic level. In contrast to the booming High Street, online sales actually fell by -0.6% against September and a hefty -8.2% compared to October 2020. However, they still snatched 27.3% of people’s entire retail spend.
?ParcelHero’s own research shows that Christmas online sales rose by a stunning 56% last year compared to 2019 and that ecommerce spending will soar in November as present buying starts in earnest. In fact, this year, 1 in 3 shoppers plan to buy entirely online. With all this in mind, we fear many of our leading retailers’ final online order delivery dates are too optimistic this year, and that they haven’t built in a safety margin for delays and stock shortages created by Covid and Brexit. Given the current strain on delivery services, we won’t be surprised if retailers change to earlier final order dates as Christmas nears.”
Wayne Snyder, VP of retail industry at Blue Yonder, says: “Christmas has always been the most important time for retailers. Over the past few years, however, we’ve seen that spending has started to take place much sooner, with consumers looking to make the most out of seasonal sales on days such as Black Friday, Cyber Monday and Singles Day. Now we’re seeing a shift away from buying ‘things’ to buying ‘experiences’ – all of these changes have a serious impact on the long-term health of supply chain functionality, and the survival of retail.
“To make the most of this season, retailers must prioritise planning and stock management. This is particularly important this year, following recent shortages, an influx of panic buying, and continued delays due to a lack of lorry drivers. The retailers who fail to get ahead and plan accordingly will fail to capitalise on the opportunity presented by the festive period.”