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Shift online appears to slow as lockdown starts to ease, ONS data suggests

Shoppers appear keen to return in-store but still nervous about crowds. Image: Shutterstock

Shoppers made a slightly smaller proportion of their retail purchases online as they started to emerge from lockdown in March, the latest official figures suggest. 

Online accounted for a slightly smaller share of UK retail spending in March as Covid-19 restrictions started to ease and in-store sales increased, the latest retail sales figures suggest. Just over a third (34.7%) of retail transactions took place online last month, according to the ONS Retail Sales report for March 2021. That’s down from 36.2% of retail sales taking place online in February, when travel was more limited. But it’s well up compared to March 2020, when 23.1% of spending was online. April’s figures are likely to show still fewer 

The online moderation came as across sales channels, shoppers spent 4.8% more in March to buy 4.9% more goods, excluding automotive fuel, than they did the previous month, in February 2021. And they spent 7.7% more than they did a year earlier, in March 2020, to buy 7.9% more goods. Excluding automotive fuel, they spent 3.2% more in March 2021 than in pre-pandemic February 2020 to by 3.8% more goods. That marks a recovery from January and February 2021, when shoppers spent less than they had before the pandemic.

How shoppers spent online

Just over a third (34.7%) of UK retail sales took place online in March 2021, according to ONS estimates. Ecommerce sales in the month were up by 62% compared to the same time last year, and by 0.6% on the previous month. Online food sales were 105% up in March compared to a year earlier, and up by 0.2% compared to the previous month. They accounted for 11.7% of all sales in the category.

Almost 40% (39.5%) of non-food online sales took place online in March 2021, following year-on-year growth of 79.7% and month-on-month growth of 2.8%. Clothing, footwear and textiles saw the strongest month-on-month sales rise as online spending in the category grew by 10.9% compared to February, and were 78.2% ahead, year-on-year. More than half (55.7%) of sales in the category were online. “This was the largest monthly growth in the sector since June 2020,” says the ONS report, “with feedback from retailers suggesting that the upcoming easing of coronavirus restrictions had prompted consumers to update their wardrobes in preparation for being able to meet friends and family outdoors again.”

In other non-food categories, online sales were broadly slightly up or slightly down on the previous month – February. That may reflect shoppers returning to stores, but nonetheless online sales remain well up compared to the previous year – suggesting that shoppers are still doing more shopping online than they did before the Covid-19 pandemic.

Department store online sales, for example, were up by 37.7% on the previous year, but down by 0.3% on the previous month. More than a third (34.3%) of retail sales in the category took place online. 

Ecommerce spending on household goods was 99.7% up on the previous year, but down by 0.7% on the previous month. Some 36.7% of sales in the category were online. Spending in ‘other’ shops – from electricals stores to jewellers and bookshops – were up by 112.4% on a year earlier, and by 1.2% on the previous year. Just under half of online shopping (weighted at 48%) takes place with online-only retailers. Sales in this non-store category grew by 38.9% on last year, and dipped by 1.3% on February 2021. Some 83.2% of retail sales in the non-store category take place online; while it is predominantly made up of pureplays, the category also includes market stalls and auctioneers among others. 

Industry response

Industry figures say getting the in-store experience right both online and in-store will matter as stores reopen.

Gizem Günday, partner at McKinsey & Company, says: “Our analysis shows that we’re not going to see a full-scale return from online shopping back to bricks and mortar stores. In fact, 92% of consumers said they plan to continue spending online post-pandemic, showing strong intent to continue buying vitamins, OTC medicines, published content and clothing online.  Retailers are busy adapting to this transformation in consumer behaviour. Those that get the balance between online and in-store experience right will emerge stronger.”

Melissa Minkow, retail industry lead at CI&T, says the recovery in clothing sales is sign of pent-up demand as consumers approach the end of lockdown. She says: “With non-essential retail now open, we’re seeing this play out in brick-and-mortar. The excitement and morale boost surrounding the cultural aspect of shopping has certainly been the key takeaway since shops reopened.

“The sense of normalcy provided by brick-and-mortar retail is being welcomed with open arms, but too much damage was done to stores during lockdown to say which businesses will ultimately survive in a vaccinated world. Success in retail has always been a long-term game, so while we’re seeing a significant boost in footfall, the sustainability of these numbers is questionable. The most resilient brands have and will continue to invest in ecommerce and the experiential component of brick-and-mortar that consumers have had to forgo over the last year.”

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