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Shoppers moved their spending further online amid February downpours

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More retail sales took place online in February as heavy rain and flooding kept many shoppers at home, the latest official retail sales figures suggest. 

Some 19.6% of all retail sales were online during the month, up from 19.1% a year earlier, according to the latest ONS Retail Sales Report, for February 2020.

Across all channels, including stores, shoppers spent more in February than they did a year earlier, but less than they did the previous month, according to the report. 

The coronavirus outbreak does not seem to have affected retail sales during the period analysed, with all data gathered by February 29. However, says the ONS, a small number of retailers suggested that fewer online orders were shipped from China because of the impact of Covid-19.

Online sales

Some 19.6% of all retail sales were online during the month, up from 19.1% a year earlier, according to the ONS report. Online sales rose by 5% compared to last year, with large rises for clothing and footwear and household goods shops. They were up by 2% compared to last month. 

Online grocery spending grew by 0.8% compared to last year, and by 0.3% compared to last month. Some 5.4% of all spending in this category took place online.

Ecommerce spending on clothing, footwear and textiles grew by 14.9% on last year, and by 11% on last month; overall 19.7% of retail sales in this area were online.

Department stores saw online spending fall by 9.3% compared to last year, and grow by 4% compared to last month, with 16.5% of sales completed over the internet.

Household goods stores saw 14.3% of sales take place online, having grown by 6.1% on last year and 5.8% on last month. 

Online sales at non-store retailers – whose trade was 81.1% online – grew by 7% on last year, and  fell by 0.7% on last month. 

Sales across all channels

Shoppers spent 1% more in February to buy 0.5% more goods – excluding automotive fuel – than they did a year earlier, the ONS figures suggest. But they spent 0.5% less than they did in the previous month of January, and bought 0.5% fewer goods. 

Looking to the longer-term trend, retail spending was up by 1.4% in the three months to February compared to the same period a year earlier, as shoppers bought 0.8% more goods, again, excluding fuel. But it was down by 0.2% over the latest three months compared to the previous three months. 

Food spending grew by 0.6% compared to last year, and fell by 0.4% compared to last month. Overall, non-food stores saw sales fall by 0.6% compared to last year, but grow by 0.1%. Department store spending fell by 3.6% compared to a year earlier, and by 1% compared to a month earlier. Spending rose slightly in clothing, footwear and textile stores (+1.3% on last year, +0.2% on last month) and in household goods stores (+0.2% on last year, +0.8% on last month). Spending in ‘other’ stores, which includes electricals, fell by 1% on last year, and rose by 0.3% on last month. Overall, spending in non-store retailing businesses grew by 4.2% compared to last year and fell by 2.8% on last month. 

Industry comment

Ryan Broomfield, partner and retail specialist at accountants RSM said: “Food stores even saw their volumes reduce in February, something that will likely be reversed when the March numbers drop in next month. It will also be interesting to see the numbers on wider ecommerce sales in the March period, as most people work from home.

“What’s clear is that even before coronavirus hit, many operators were already struggling. The shock from the complete collapse in revenues in March will put many on the critical list, regardless of the welcome and much needed Government support packages.

“With such uncertainty surrounding the length of the lockdown, it is likely to be some time before normality – and consumer confidence – returns. When that happens, the high street as we know it now may look very different indeed.”

James Manderson, general manager of customer engagement platform Braze, said: “Although the latest ONS figures are largely unaffected by recent developments, we must not ignore that we’re now living, and shopping, in very different circumstances and that the next set of figures will naturally reflect this.

“UK retailers must stay positive and focused on what they can do at this time. If we look at what successful retailers did in China during the ’new normal,’ digital offset physical store closures. It’s positive to see that digital is already in a healthy state of growth in the UK, with online sales up to 19.6% in February, compared to 19.1% in January.

“Moving forward, it’s imperative retailers acknowledge the situation and are thoughtful with their communication. In the recent weeks, we’ve all received ‘touch base’ emails from hundreds of companies. Instead of these types of misplaced communication, UK retailers must concentrate on their existing customer base and deliver personalised experiences that show them they truly care. With nimble tech and data they can build communications around what customers actually need. For some, that might be offering promotions for things that enhance customers’ stay home experience.

“Ultimately retailers need to be human. The risk of coming off tone deaf during this time could mean a lost customer, which no retailer can afford ever – and especially not now.”

Hugh Fletcher, global head of consultancy and innovation at digital consultancy Wunderman Thompson Commerce, said: “The latest figures from the ONS are an indication of the direction the retail industry is headed in, even before the impact of the uncertainty surrounding Covid-19. With sales figures already on the decline, the coming months, if not years, will be a challenging period for many retailers. Many must pivot their businesses and adapt their sales models, and they will have to adapt their offerings via digital channels to increase short- and long-term chances of success.

“Digital commerce will be an important channel for all retailers as they look to adapt in a retail environment where footfall will be at an all-time low. Consumers have been showing their preference towards online purchasing for years now; according to our research, 62% of UK customers intended to increase their usage of digital shopping channels even before the challenges around lockdown and Covid-19. Presented with little choice, retailers will have to ensure that they have an omnichannel offering that can offer the best of both experience and convenience, as they look ahead to the coming months and years.”

Our view: February’s spending figures already seem to reflect ancient history, given the pace with which things have moved since then. What they do very effectively is show the ‘before’ coronavirus picture. They clearly show how small a proportion of grocery spending took place online as recently as February – a base from which supermarkets are already expanding as quickly as they can by taking on extra warehouse and store staff. 

Other sectors won’t have the option of selling through their now closed stores, and will be looking to do more business online instead. As Hugh Fletcher of Wunderman Thompson Commerce says, there’s now little choice but to work out how best to do that. He suggests that retailers must focus on what shoppers living in very different circumstances now need. This may well be a path to a different kind of retailing, one not just for the short term – but for the indefinite future.

Image: Fotolia

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