Shoppers spent less online and across channels in December than they did in November. But they also did marginally more of their spending online than they had the previous month, at a time when fears about the Omicron Covid-19 variant were rising ahead of Christmas, official figures suggest.
Overall spending in December fell month-on-month both online (-1.8%) and across all sales channels (-2.8%), according to the ONS Retail Sales Report for December 2021. A slightly greater share of spending took place online in December (26.6%) than in November (26.3%),
It seems that shoppers may have done their festive buying in November – and earlier – to avoid last minute problems. In the event, footfall figures from Springboard suggest that in-store visitor numbers were hit as the Omicron Covid-19 variant emerged in the run up to Christmas. “Shopping centre retail footfall for this period was at its lowest relative level since the week beginning 25 July 2021, which may be because of more cautious behaviour caused by the emergency of the Omicron variant,” says the ONS report. Shoppers spent more online than in November in just two categories – food and ‘other’ stores, such as toy, games and sports shops.
Online sales were lower than last year in most categories, reflecting a December 2020 in which shoppers had been pushed online by Covid-19 related trading restrictions affecting non-food shops in all parts of the UK in the early part of the month, followed by a move to regional restrictions.
Across the whole of 2021, retail sales volumes grew by 5.1% – the strongest growth since 2004 (+5.1%) and was last higher than that in 2002 (+5.7%). “However,” says the ONS report, “growth between 2020 and 2021 should be interpreted with caution given restrictions on travel and non-essential retail which contributed to a fall in sales during 2020.”
How shoppers spent online
Some 26.6% of sales were online last month, up from 26.3% in November – and still well ahead of the 19.7% of sales that were online in pre-pandemic February 2020.
When it comes to food, 14.7% of sales were online, with spending up by 9.1% on November as shoppers did festive grocery shops in the run-up to Christmas. Spending was 0.1% lower than in December 2020.
Non-food online sales were down overall. Some 23.3% of sales took place online – with sales 2.2% lower than last month and 10.1% down on last year. Almost a quarter (24.3%)
of department store sales took place online, with spending down both on the previous month (-9.9%) and the previous year (-33.2%). A similar proportion of clothing and footwear sales (24.9%) were online, down on November (-3.4%) and on December 2020 (-14.1%).
Household goods sales were 23% online, with shoppers spending more than the previous month (+2.7%) but less than last year (-4.9%). Just over a fifth of sales (21.7%) in ‘other’ stores, such as sports, games and toy shops were online, with sales higher on both November (+6.5%) and December 2020 (+8%).
How shoppers spent across channels
Shoppers spent 2.1% more in December 2021 than they did in December 2020 to buy 3% fewer goods – a reflection of the 5.4% rise in consumer prices inflation in December. They also spent 2.8% less than they did in November 2021 to buy 3.6% fewer goods. When fuel was included, shoppers spent 3.1% less to buy 3.7% fewer goods; this figure was however 2.6% higher than in pre-pandemic February 2020.
Non-food sales volumes were down by 7.1% month-on-month in December 2021, as sales fell in every non-food category, including department stores (-6.3%), clothing (-8%), household (-3.2%) and ‘other’ stores such as sports equipment, games and toy shops (-8.9%). Sales in all non-food categories were also below the level seen in February 2020.
Industry response
Sarah Edge, director of sales, UK and Ireland at enterprise mobility specialist SOTI , says: “The only certainty is uncertainty in this volatile retail environment and the peak 2021 shopping period was no exception. Hit by the double whammy of a rise in Omicron cases and shortages instigated by the supply chain crisis, retailers had to pivot fast to win sales.
“SOTI’s own research found that consumers have felt the effects of supply chain issues first-hand, with over half (58%) of UK consumers saying they have recently experienced one or more items not being available, while over one third (38%) said items they wanted to purchase have not been available at all. The brands and retailers that are succeeding in this volatile market are the ones that have rethought how they approach customer relationships and go-to-market strategies in response to this state of flux. Those who haven’t, must consider applying a mobile-first strategy across their entire online and offline operations to streamline the value chain, from supply to distribution to shop floor. Knowing exactly where items are located and in what quantities is essential when dealing with rapidly changing demand and allows companies to shrink their inventory and increase product velocity through the supply chain.”
David Jinks, head of consumer research at delivery comparison business ParcelHero, says: ‘While the value of sales was up as people splashed the cash on expensive items, the actual amount of goods sold fell by -0.9% YOY and -3.7% compared to the previous month, November. That -3.7% figure is the biggest monthly December decline since current records started in 1996.
“And while online sales values fell -8.3% against December 2020 and -1.8% compared to the previous month, as a slice of the overall retail market, they actually rose slightly to 26.6% in December 2021, up from 26.3% in November. Keep in mind that, just before the pandemic hit, online sales were just 19.7% of all retail sales in February 2020. Overall, these figures show that the arrival of Omicron threw a spanner in the works for retailers’ recovery plans at the worst possible time of the year. As Brits became aware of how quickly Omicron was spreading, they abandoned the High Street but didn’t turn to online in massive numbers.
“Why was this? As we already know, millions of canny shoppers had bought most of their presents in November to avoid Christmas delivery delays and crowded stores. The value of overall retail sales rose a staggering 10.8% in November. It’s increasingly the pattern that November sales, including Black Friday and Cyber Monday, don’t boost retailers’ overall Christmas profits, they merely rob sales from December.”
